The Role of Technology Spillover (Through Foreign Direct Investment and Imports of Goods) on Industrial Export of Iran's Economy

Recent theories of international economics traditionally know the oriented innovation in reaction to economic incentives as a principle engine of technological progress and competitiveness. With this view, the innovation depends on knowledge resulting from R&D activities on the one hand and it helps to stock knowledge on the other hand. Consequently, exports to depend on the stock of R&D activities and the stock of effective knowledge and the relationship between them. Also, it can be stated, in addition to promoting exports of each country affected by the stock of domestic R&D activities, but it depends on stock of foreign research and development (through imports of goods and foreign direct investment inflow). The aim of this study is to evaluate the role of real variables stock of domestic R&D activities, stock of foreign R&D activities (through imports of goods and foreign direct investment inflow) and also price variables, exchange rate and inflation rate on industrial export of Iran's economy during the period 1970-2007 with ARDL approach. Estimation results indicate that real variable coefficient of the stock of domestic R&D capital, stock of foreign R&D activities (through the imports of goods), coefficient stock of foreign R&D capital (spillover from FDI in flow channel) is positive and significant. Also exchange rate has a positive and significant effect but inflation rate’s coefficient has negative and significant on industrial export.