However, the levels of technology gap are neither too large nor too small to create the
spillovers. The results reported in columns (2) and (4) point to this direction. Specifically, the
result does not support the hypothesis of Glass and Saggi (1998) that a relationship exists
between technology transfer and technology gap, thus demonstrating that the smaller the
technology gap, the larger is the extent of high-quality FDI. One plausible explanation for this is
that FDI firms have not really transferred the state-of-the-art technologies.