Absorptive capacity of human capital and international R&D spillover on labour productivity in Egypt

Abstract

The purpose of this paper is to investigate the relationship between labour productivity, human capital and international R&D spillover over the period 1982-2011. Design/methodology/approach: The study estimates a single equation model which employs long run cointegration analysis and short run analysis (ECM). It is based on annual data collected from the World Bank and the Ministry of Planning in Egypt and OECD database for the period 1982-2011. Findings: The results show a conventional result for international R&D and human capital. We infer a significant positive role played by international R&D and human capital on labour productivity. Practical implications: This study highlights an important area for policy decision making, which is stressing the idea that human capital absorptive capacity, enhanced by the quality of education, intensifies the positive effect of R&D spillover on labour productivity. This was determined by our survey of the literature and an empirical model.