The Determinants of High Technology Exports Volume : A Panel Data Analysis of EU-15 Countries

High technology exports (HTX) are considered as an important factor for sustainable economic growth for a country. One of the most important prerequisite to high tech manufacturing and export is technology ownership. Technology ownership can be gained through technology transfer by the way of inward foreign direct investments (FDI). Although many scholars emphasize foreign direct investments as a cheap and easy way of technology transfer, the role of human capital of the host country is considered as an important factor in this process. Another important aspect is economic freedom level (EFL) of the host country which is associated with FDI attraction of the host country. Here, we hypothesize that HTX are a longitudinal function of a country's level of inward FDI, EFL and human development level (HDL). We examine the associations among above mentioned variables using a panel data of EU-15 countries for the period 1995-2010 and find that EFL, HDL and FDI aggregately have a statistically significant positive impact on HTX by conducting panel cointegration method. Additionally, we employ panel causality test and see that there is long-run Granger causality running from FDI, HDL and EFL to HTX, and similarly from HTX, FDI and EFL to HDL