The Impact of Knowledge Spillovers from Imports and Foreign Direct Investment in Iran on Total Factor Productivity, with Emphasis on the Role of Human Capital Quality

Articles in Press

Document Type : Research Article

Authors

1 University of Tabriz

2 Univewrsity of Tabriz

10.22034/jepr.2026.145949.1364

Abstract

This study examines how knowledge spillovers from imports and foreign direct investment (FDI) affect total factor productivity (TFP) in Iran from 2000 to 2024, focusing on human capital quality as an absorptive capacity. Using factor analysis to construct a human capital quality index and the generalized method of moments (GMM) for estimation, the results show that human capital quality, FDI, and R&D have positive and significant direct effects on TFP. However, the direct effect of import-related knowledge spillovers is negative and significant. The positive interaction between human capital quality and FDI, as well as between imports and FDI, indicates that absorptive capacity and complementary transmission channels enhance productivity gains from foreign knowledge. Conversely, the negative interaction between imports and human capital quality suggests that, given Iran’s current economic structure, human capital alone cannot effectively convert knowledge embedded in imports into sustained productivity improvements. The findings imply that productivity strategies in Iran should go beyond expanding external linkages and instead prioritize strengthening the quality of absorption, adaptation, and utilization of foreign knowledge.

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Journal of Economic Policies and Research

Articles in Press, Accepted Manuscript
Available Online from 29 August 2026

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History

  • Receive Date: 26 May 2026
  • Revise Date: 26 August 2026
  • Accept Date: 29 August 2026
  • Publish Date: 29 August 2026

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