Foreign Investment and Technology Transfer: A Simple Model / Magnus Blomstrom, Jian-Ye Wang.

Format:

Book

Author/Creator:

Blomstrom, Magnus.

Contributor:

National Bureau of Economic Research.

Wang, Jian-Ye.

Series:

Working Paper Series (National Bureau of Economic Research) no. w2958.

NBER working paper series no. w2958

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Foreign Investment and Technology Transfer

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1989.

Summary:

This paper develops a model in which international technology transfer through foreign direct investment emerges as an endogenized equilibrium phenomenon, resulting from the strategic interaction between subsidiaries of multinational corporations and host country firms. The model explicitly recognizes two types of costs -- the costs to the multinational of transferring technology to its subsidiaries and the learning costs of domestic firms -- and treats technology transfer in a game theoretic context. The model points to the importance of the learning efforts of host-country firms in increasing the rate at which MNCs transfer technology. The paper also explores some of the reasons why learning investment in host country firms may be suboptimal.

Notes:

Print version record

May 1989.