Fifth, we explore the role of human capital in the process of spillovers. As Borensztein et
al. (1998) point out, the absorptive capacity of a host country depends on the stock of human
capital. Moreover, they find that FDI and human capital have a strong complementary
relationship. I find evidence that the effect of FDI spillovers on the long-term rate of productivity
growth of domestic firms is positively associated with the level of human capital of domestic