Mode of Foreign Entry, Technology Transfer, and FDI Policy

Mode of Foreign Entry, Technology Transfer, and FDI Policy PDF

Author: Aaditya Mattoo

Publisher: World Bank Publications

Published: 2001

Total Pages: 42

ISBN-13:

DOWNLOAD EBOOK →

When technology transfer is costly, a foreign firm and host country government may differ in their preferences over direct entry and acquisition. Government intervention could help induce the socially preferred choice.

Mode of Foreign Entry, Technology Transfer, and Foreign Direct Investment Policy

Mode of Foreign Entry, Technology Transfer, and Foreign Direct Investment Policy PDF

Author: Aaditya Mattoo

Publisher:

Published: 2016

Total Pages: 42

ISBN-13:

DOWNLOAD EBOOK →

When technology transfer is costly, a foreign firm and host country government may differ in their preferences over direct entry and acquisition. Government intervention could help induce the socially preferred choice.Foreign direct investment can take place through the direct entry of foreign firms or the acquisition of existing domestic firms. Mattoo, Olarreaga, and Saggi examine the preferences of a foreign firm and the host country government with respect to these two modes of foreign direct investment in the presence of costly technology transfer. The tradeoff between technology transfer and market competition emerges as a key determinant of preferences.The authors identify the circumstances in which the choices of the government and the foreign firm diverge - and in which domestic welfare can be improved by restrictions on foreign direct investment that induce the foreign firm to choose the socially preferred mode of entry.This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to understand the determinants of trade in services in developing countries. The authors may be contacted at [email protected], [email protected], or [email protected].

Trade, foreign direct investment, and international technology transfer : a survey

Trade, foreign direct investment, and international technology transfer : a survey PDF

Author: Kamal Saggi

Publisher: World Bank Publications

Published: 2000

Total Pages: 50

ISBN-13: 1706080972

DOWNLOAD EBOOK →

Abstract: May 2000 - How much a developing country can take advantage of technology transfer from foreign direct investment depends partly on how well educated and well trained its workforce is, how much it is willing to invest in research and development, and how much protection it offers for intellectual property rights. Saggi surveys the literature on trade and foreign direct investment - especially wholly owned subsidiaries of multinational firms and international joint ventures - as channels for technology transfer. He also discusses licensing and other arm's-length channels of technology transfer. He concludes: How trade encourages growth depends on whether knowledge spillover is national or international. Spillover is more likely to be national for developing countries than for industrial countries; Local policy often makes pure foreign direct investment infeasible, so foreign firms choose licensing or joint ventures. The jury is still out on whether licensing or joint ventures lead to more learning by local firms; Policies designed to attract foreign direct investment are proliferating. Several plant-level studies have failed to find positive spillover from foreign direct investment to firms competing directly with subsidiaries of multinationals. (However, these studies treat foreign direct investment as exogenous and assume spillover to be horizontal - when it may be vertical.) All such studies do find the subsidiaries of multinationals to be more productive than domestic firms, so foreign direct investment does result in host countries using resources more effectively; Absorptive capacity in the host country is essential for getting significant benefits from foreign direct investment. Without adequate human capital or investments in research and development, spillover fails to materialize; A country's policy on protection of intellectual property rights affects the type of industry it attracts. Firms for which such rights are crucial (such as pharmaceutical firms) are unlikely to invest directly in countries where such protections are weak, or will not invest in manufacturing and research and development activities. Policy on intellectual property rights also influences whether technology transfer comes through licensing, joint ventures, or the establishment of wholly owned subsidiaries. This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to study microfoundations of international technology diffusion. The study was funded by the Bank's Research Support Budget under the research project Microfoundations of International Technology Diffusion. The author may be contacted at [email protected].

Technology Transfer and Foreign Market Entry

Technology Transfer and Foreign Market Entry PDF

Author: Ahmed Samir Elsayad

Publisher:

Published: 2004

Total Pages: 0

ISBN-13:

DOWNLOAD EBOOK →

The topic of technology transfer has been studied from several perspectives ; however, very few of these addressed the association beetween technology transfer and various foreign market modes of entry in developing countries, and especially in Egypt. Moreover, a coherent and systematic framework for understanding the dynamics of the process of technology transfer does not clearly emerge from the literature; neither does the assessment of the implications of national policy and interlinked issues on the content of technology transferred from foreign market modes of entry. Hence, the key objectives of the current thesis are "To develop a dynamic conceptual framework that allows for systematic representation and exploration of the process of technology transfer associated with different modes of foreign entry into a host developing country (Egypt); To empirically explore the dynamic process of technology transfer associated with foreign market modes of entry into Egypt; and To assess and critique Egypt's current policy environment impacting on modes of foreign entry into Egypt and their associated technology transfer". This thesis qualitatively explores the technology transfer process occurring in foreign companies operating in Egypt, under various contractual and investment modes of entry. The empirical findings of the multiple case analyses (conducted using in-depth interviews) and the subsequent cross-case synthesis showed that the framework developed in this thesis is valid and applies well to all explored cases. Findings also revealed that the highest level of technology transfer occurred at start-up phases of all modes. This transfer involved all components of technology. In cases of FDI and JVs, technology transfer is sustained through continuous and regular foreign interactions, and increases with the introduction of new `events' such as new product lines being added. In the licensing modes, a slow down of technology transfer is found after start-up phases. In regards to linkage issues impacting on both foreign entry and technology transfer, the findings confirmed many expectations outlined from the literature, such as the importance of learning, compatibility of partners, contractual perspectives (and others). Some issues emerging from literature were not substantiated by findings of this thesis such as the importance of technological gaps in entry mode decisions. In addition, new issues were identified, such as the overwhelming impacts of Egyptian government measures that hamper many aspects of technology transfer. Such policy measures include exchange rate policy, as well as inconsistencies and inflexibility of policy implementation. This thesis concludes that modes of foreign entry into Egypt and technology transfer are tightly coupled, but are subject to the effects of many issues. A better understanding of the dynamics of the technology transfer process associated with foreign entries, along with an integrated and more flexible policy framework are essential requirements for attracting quality foreign investments, and catalysing associated transfer of technology. Finally, conducting research on a highly contextual topic such as technology transfer associated with modes of foreign entry, in the very challenging research environment of Egypt (due to many factors such as culture, absence of previous empirical efforts and the current turmoil in the economy) has resulted in several methodological and theoretical contributions. These contributions, along with the limitations of the research and directions for future efforts are discussed.

Global Integration and Technology Transfer

Global Integration and Technology Transfer PDF

Author: Bernard M. Hoekman

Publisher: World Bank Publications

Published: 2006-04-27

Total Pages: 370

ISBN-13: 0821361260

DOWNLOAD EBOOK →

The importance of international technology diffusion (ITD) for economic development can hardly be overstated. Both the acquisition of technology and its diffusion foster productivity growth. Developing countries have long sought to use both national policies and international agreements to stimulate ITD. The 'correct' policy intervention, if any, depends critically upon the channels through which technology diffuses internationally and the quantitative effects of the various diffusion processes on efficiency and productivity growth. Neither is well understood. New technologies may be embodied in goods and transferred through imports of new varieties of differentiated products or capital goods and equipment, they may be obtained through exposure to foreign buyers or foreign investors or they may be acquired through arms-length trade in intellectual property, e.g., licensing contracts. 'Global Integration and Technology Transfer' uses cross-country and firm level panel data sets to analyze how specific activities exporting, importing, FDI, joint ventures impact on productivity performance.

Techological Leadership and Foreign Investors Choice of Entrty Mode

Techological Leadership and Foreign Investors Choice of Entrty Mode PDF

Author: Beata K. Smarzynska Javorcik

Publisher: World Bank Publications

Published: 2000

Total Pages: 38

ISBN-13:

DOWNLOAD EBOOK →

Developing country governments tend to favor joint ventures over other forms of foreign direct investment, believing that local participation facilitates the transfer of technology and marketing skills. However, foreign investors who are technological or marketing leaders in their industries are more likely to invest in wholly owned projects than to share ownership. Thus in R&D-intensive sectors joint ventures may offer less potential for transferring technology and marketing techniques than wholly owned subsidiaries.

International Technology Transfer to Developing Countries

International Technology Transfer to Developing Countries PDF

Author: Kamal Saggi

Publisher: Commonwealth Secretariat

Published: 2004

Total Pages: 104

ISBN-13: 9780850927955

DOWNLOAD EBOOK →

Bridging the technology gap is an issue faced by most countries, but in developing countries the issue is doubly critical. Not only do they lag further behind relative to other countries but they also face more stringent resource constraints. This title provides a through overview of the economics of ITT relevant to developing countries and will be invaluable as a reference tool for policy makers, trade officials and trade negotiators.Part One identifies the role played by existing policy in trade, foreign direct investment and intellectual property rights in facilitating International Technology Transfer (ITT). Pertinent analysis of the major implications of the report is given.The WTO Working Group on Trade and Technology Transfer was established with the aim of encouraging technology transfer to developing countries. Part Two outlines the Group's findings for increasing flows of technology.

Technology Transfer to China Through Foreign Direct Investment

Technology Transfer to China Through Foreign Direct Investment PDF

Author: Ping Lan

Publisher:

Published: 1996

Total Pages: 312

ISBN-13:

DOWNLOAD EBOOK →

This work deals with international technology transfer, particularly to China through foreign direct investment (FDI). The book focuses on the technology transferability of inward investment, or the technological leap forward of Chinese firms through the local operations of FDI at present.

The Competitive Advantage of Regions and Nations

The Competitive Advantage of Regions and Nations PDF

Author: Boris Ricken

Publisher: Gower Publishing, Ltd.

Published: 2011

Total Pages: 258

ISBN-13: 9781409402381

DOWNLOAD EBOOK →

In The Competitive Advantage of Regions and Nations, the authors stress that companies, investment promotion agencies, and government bodies cannot simply sit and wait until new technologies arrive in their domain. Rather, they need to manage the identification, assessment, attraction, absorption and application of new technologies. In this comprehensive book, Boris Ricken and George Malcotsis explain how technology transfer in Foreign Direct Investment (FDI) projects can be systematically managed. Using some 40 case studies as illustration, they give step-by-step guidance for managers.