The Interaction of Innovation and Globalization Components on Foreign Direct Investment

In many countries, especially developing countries, foreign direct investment is considered as one of the most vital capital flows and the driving engine of economic growth and development. So that since the 80s, new factors and variables have been proposed as a stimulus for attracting foreign direct investment and have attracted the attention of economists, in which the impact of innovation and globalization variables is felt despite their importance. Therefore, the aim of the current research is to investigate the interaction of the components of innovation and globalization on the inflow of foreign direct investment in the top 47 science-producing countries in the world in the period from 2011 to 2020. For this purpose, the econometric approach of dynamic panel data and dynamic generalized moment’s estimator has been used to estimate the model. The results of the research model show that all the studied variables with different estimated coefficients have a positive and significant effect on foreign direct investment. So that the improvement of each of the five innovations input variables (institutions and institutions, human capital and research, infrastructure, market complexity and business complexity) increases the amount of foreign direct investment in this category of countries. Also, the interaction of all the input indicators of innovation and globalization on the attraction of foreign direct investment is positive and significant. Therefore, it is recommended that in the legislative sector, institutions and organizations help attract funds by adopting correct laws that have the necessary quality and transparency. In the implementation and control sector, the related institutions and organizations must work efficiently and effectively in the field of bureaucracy, taxation, reducing corruption, etc. In addition, by taking advantage of the atmosphere of globalization in various fields, especially in the parts related to the complexities of the market, they should be used to improve the structures of innovation, and also the training of capable human resources and managers should be put on the agenda.