| By establishing an endogenous Cobb-Douglas model with knowledge-driven R&D, this paper aims to investigate the relationship between technology spillover effects through foreign direct investment, industrial's absorptive capability and endogenous labor productivity. The solution of the competitive equilibrium problem shows that both improvement of absorptive capability and higher human capital stock lead to higher labor productivity, investigating the meaning of the HSINCHU Science Park's policy.The basic finding in our model is that the improvement of matching degree between foreign direct investment and domestic human capital has a positive effect. The improvement of matching degree between foreign direct investment and proper human capital has a level effect on labor productivity. R&D expenditures have an unobserved effect on labor productivity as a result of data of the total R&D expenditures which can not reflect the precise function in the model.Based on our sample data set of HSINCHU Science Park's 6 industries during the period of 1988～2004, econometric estimation of labor productivity demonstrates that technology spillover is essentially dependent on foreign direct investment, which is measured as both human capital investment and degree of openness. The domestic investment capital has an unobserved effect on labor productivity, except in Computers & Peripherals industry.The further industrial sample regression results show that absorptive capability is constrained by the relative accumulation of domestic capital in telecommunication industry, and higher degree of openness is essentially required to improve its human capital. |
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