FDI and technology transfer: the mediating role of market factors

Traditional FDI and technology transfer literature treats variables such as market factors, infrastructure, and education and training as predecessors to attract foreign investment, but it does so in an individualised way. This research aims to evaluate how these variables, when considered together, affect the attraction of FDI and technology transfer in the countries. The study used indicators of 137 countries, extracted from Global Competitiveness Report 2017-2018, published by World Economic Forum. Data were analysed using structural equation modelling. The research revealed that some market factors play a mediating role between the variables infrastructure and education and training regarding the attraction of FDI and technology transfer when all variables are analysed together in a single model. In addition, the size of domestic market is not necessarily an important variable in this context. This research contributes to the advancement of knowledge in the area since it shows an alternative and complementary way of understanding these relations.