Presenting the foreign direct investment model and economic growth of developing countries with the mediating role of human capital and information technology and communication

One of the most important goals of the countries, especially developing countries, is economic growth and development. One of the sources that can retrieve the lack of capital in the developing countries and lead to economic growth is foreign direct investment. In this way, there are important factors that can have an effective role as a mediator in foreign direct investment in economic growth. One of them is human capital, which can be a facilitator to transfer the related technology to foreign direct investment. Furthermore, some evidence shows the human capital plays a mediating role in the impact of foreign direct investment on economic growth. The other important factor that can affect economic growth and the prosperity of countries, is the information and communication technology. These two factors can help to empower the country's production capacity in different parts of the economy. Thus, it can be mentioned that foreign direct investment with human capital and information and communication technology are the major factors that can have an impact on economic growth. Based on what is mentioned, the current research aim is to present a foreign direct investment model and economic growth in developing countries with the mediating role of human capital and information and communication technology. This study is performed by multi group model and structural equation models to investigate the mediating role of human capital and information and communication technology in the impact of foreign direct investment on economic growth.The study populations are the developing countries between 2000-2018. In this research, the developing countries in three continents of Asia, Africa, and Southern America have been selected. Then, the countries are divided into four different income groups: developing countries with high-income, developing countries with higher than medium income, developing countries with lower than medium income, and developing countries with low-income. There are 9 Asian countries, 9 African countries, and 9 Southern American countries are chosen to study in this research. The reason for choosing these countries is the available and complete analytical data they had on the world bank site, especially in the case of human capital, which is an important variable but fewer countries provide complete information about this case. Thus, in the end, 27 countries in three continents have been chosen as the statistical sample. The method used in this study is the multi-group modeling approach with the structural models with partial least square (PLS) approach. In this method, it will be possible to investigate and compare groups with different incomes in developing countries.Before estimating the method, its validity has been approved by Cronbach's alpha, ρ, CR, AVE standards, and diagnostic validity. The results showed that only in the developing countries with high income, the human capital and information and communication technology have a mediating role on the impact of foreign direct investment on economic growth. Thus in high income countries, foreign direct investment affects human capital by 0.609 and human capital affects economic growth by 0.428. Foreign direct investment affects information and communication technology by 0.482 and information and communication technology by 0.348 affects economic growth. In the other income groups in developing countries, these two variables couldn’t have any impact on foreign direct investment on economic growth as a mediator. This result indicates that the countries with high income have found out that it is possible to increase productivity because of the high-level human capital and skilled workers through transferring new technologies and technology overflow. It is also possible to improve information and communication technology and this subject acts as a positive factor in economic growth.Based on the results, it is recommended for developing countries to implement human capital, information and communication technology in foreign direct investment and increase economic growth by using these factors. If the developing countries have foreign direct investment in the form of technology transfer and employ human capital, information and communication technology, they will be able to beneficially use the premium technology that comes in through foreign direct investment and as a result, they can improve economic growth in their country.