Foreign Direct Investment

Theoretical Definition: The causal (independent) variable is the inward Foreign Direct Investment (FDI) to the technology sector. Foreign direct investment is investment (lasting presence) by foreign investors in productive assets in an entity located in an economy (the host country) other than the one in which the foreign investor is located (the source country) (OECD, 1996; World Bank, 2003; International Monetary Fund, 2001; Blonigen, 2005; Johnson, 2006a; Kornecki et al., 2008).

Dependent Variables

Dependent variables are imports and exports of the technology sector.

Exports

Theoretical Definition: Exports include goods and services that are produced domestically but sold abroad. MNEs start to trade in the foreign market, and after firms are comfortable with their partners, economic, social and political conditions, MNEs may establish a subsidiary in the host country or embark on joint ventures with local enterprises. Therefore, FDI may occur and shortly after, MNEs  may start to export (Hockman & Djankov, 1996; UNCTAD, 1996; Liu, X,. Wang, C. & Wei,Y., 2001; World Bank, 2006).

Imports

Theoretical Definition: Imports are goods and services that are foreign produced but sold domestically. Imports  indicate market presence for products and MNEs may  seek to produce them locally, therefore justifying  MNE's investment to be present in  the host country. Now in the host country, this MNEs may import basic intermediate goods and supplies produced in the country where the MNE is coming from ( intermediate goods produced by headquarters) to satisfy  quality standards (Hockman & Djankov, 1996; UNCTAD, 1996; Liu, X,. Wang, C. & Wei,Y., 2001; World Bank, 2006).

Table: Variable Definitions