(pp.285-296) E. Elish and H. El-Shamy ‘Absorptive capacity of human capital and international R&D spillover in Egypt’, IJIKMMENA, Vol. 3, No. 3/4, 2014
Purpose: 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.
Originality/value: Our study will contribute a different approach to the literature by examining the effect of international R&D spillover and human capital on labour productivity in the Egyptian manufacturing industries. Other studies were conducted by examining the effects of these variables either on total factor productivity or gross domestic product of the recipient countries. These research methods, together with the emphasis on human capital, have rarely been conducted in Egypt.
Keywords: Labour productivity, Human capital, International R&D, Cointegration, Error Correction Model