Foreign direct investment and host firms' technology development: The moderating role of overall and STEM education

This paper explores the relationship among foreign direct investment (FDI) and firms' technology development. Moreover, it assesses the moderating role of overall education and STEM education. Our empirical analysis uses a unique matched employer-employee micro dataset, the “Quadros de Pessoal”, that covers nearly all private companies and their employees of the different broad sectors of the manufacturing industry in Portugal. We apply an improved comprehensive measure of technology development based on the transition of industrial codes of firms. The results contribute to the technology management literature indicating that FDI is positively associated with the technology development, and education, particularly STEM education, is important to gain larger technological benefits from FDI.