Working Paper: NBER ID: w4289
Authors: Magnus Blomström; Art Kokko
Abstract: Do host countries aiming to maximize the inflows of technology through foreign multinationals have any policy alternatives to formal technology transfer requirements and performance requirements? To answer this question, the present paper examines some possible determinants of the technology imports of U.S. majority-owned foreign affiliates in 33 host countries. The results show that the affiliates' technology imports increase with the host countries' domestic investment levels and education levels, but that various performance requirements are negatively related to technology transfer. This suggests that policies promoting local investment, competition, and education may sometimes be alternatives to direct controls and requirements.
Keywords: foreign multinationals; technology transfer; government policies; investment; education
JEL Codes: F23; O32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Domestic investment levels and education levels in host countries (I25) | Technology imports of U.S. majority-owned foreign affiliates (L63) |
| Stricter performance requirements imposed by host countries (F29) | Technology transfer (O36) |
| Policies promoting local competition and education (L49) | Technology inflows (O36) |
| Exposing MNC affiliates to local competition and supporting domestic firms (F23) | Technology imports (L63) |