Revision with unchanged content. Due to an increase in the degree of economic openness and world economic liberalization, technology transfer has become more crucial in stimulating productivity and economic growth. Foreign direct investment and international trade are two important channels of technology transfer. Absorptive capacity; the ability to absorb and assimilate new knowledge and advanced technologies, is a crucial factor associated with technology transfer. It can be intensified by a higher level of education. This book analyzes the linkage among education, absorptive capacity, and technology transfer, also, their role in generating labor productivity. Empirical results show a positive relationship between absorptive capacity and productivity growth as well as an increase in productivity with coordination of increases in FDI inflows and trade. Other related factors are discussed to determine their impacts. Furthermore, some recommendations are proposed to promote labor productivity along with technological progress. Thus, the analysis can benefit policy makers at a domestic level. Together, it can be useful to professionals in the fields of international economics, investment, and economic development.