The Sources of Technology Transfer and Economic Growth of Iran

Technology advancement and investment in research and development (R&D) activities are the most important determinants of economic growth. According to the new theories of international trade and endogenous economic growth, investment in foreign research and development activities causes transfer of technology and new know-how to the country. Human capital also has a major role in expanding and deepening of domestic R&D activities and absorption of international R&D. Because, the country's ability to absorb foreign know how, is, inter a lid, highly dependent on human capital. The purpose of this paper is to study the effect of domestic technology and technology spillovers from the two channels of intermediate and capital goods imports as well as FDI, on the economic growth of Iran, during (1954-2008). The results indicate that accumulation of domestic R&D, and stockpile of foreign R&D from the channels of intermediate and capital goods imports and FDI and also labor force and accumulation of physical assets, have all positive and significant effects on the economic growth. In addition, in this paper we discussed various economic shocks and variance decomposition effects on the economic growth and also the impact of their changes on the rate of GDP growth. In the long-run, accumulation of capital and domestic R&D، labor, stockpile of the foreign R&D from the channels of imports and FDI, explain the most percentages of variance of error-predicting, respectively.