Capital and Technology Flows: changing technology-acquisition strategies in developing countries

Suma Athreye and Sandeep Kapur

No 1511, Birkbeck Working Papers in Economics and Finance from Birkbeck, Department of Economics, Mathematics & Statistics

Abstract: Given the imperfections in markets for technology, foreign direct investment (FDI) has been regarded as a channel for the transfer of technologies from developed to developing countries. FDI was expected to generate technological spillovers through vertical linkages with host-country firms and through involuntary leakages. Evidence suggests that inward FDI was a weak channel for technology transfer. with only limited spillovers in developing countries. With the wave of globalization that started in the 1980s, trade in disembodied technology has boomed. Some large firms in developing countries have also acquired technology through outward foreign investment, typically through acquisitions of firms with a portfolio of technology products. Reinforcing these channels for technology acquisition by developing country firms merits active policy interventions.

Keywords: technology acquisition; licensing; foreign direct investment. (search for similar items in EconPapers)
Date: 2015-05
New Economics Papers: this item is included in nep-cse
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