The Impact of Foreign Direct Investment (FDI) on Technology Transfer

Lemma, Yared (2011) The Impact of Foreign Direct Investment (FDI) on Technology Transfer. Masters thesis, Addis Ababa University.

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Technology has gaining importance as vital factor for competitiveness in the world economy. Technology transfer through Foreign Direct Investment (FDI) has become the predominant channel of technology transfer. FDI can have important technological spillovers in host economies, especially if it takes a joint-venture form subject to local control. Technology transfer has been a subject of considerable interest to many groups, such as policymakers, international funding agencies, and business executives, due to close relationship between technology transfer and economic growth. It has aroused the interest of academic researchers. Despite all this attention, however, the concept and mechanism of technology transfer remains vague, controversial, and inadequately operationalised. Unfortunately, due to the need for capital and/or absence of appropriate national technology policies, most host developing countries focus on maximizing the quantity of their FDI inflow, while underestimating the importance of appropriateness of technologies transferred through FDI. However, competitive technology has become a basic prerequisite for economic development and growth, and developing countries like Ethiopia should try to achieve best possible technological gains from FDI. Using a firm-level survey, this study examines effects of FDI on local metal and engineering firms. The survey indicates that technological inflow through FDI is an important conduit in promoting local firms to upgrade and to be competitive in national as well as international market. However, the local technological capability to adopt the technology, the collaboration between foreign based companies and local firms, and the national technology policy are very weak to benefit from FDI. The study also explores the possible contributing factors related to foreign technology transfer, such as domestic competition and linkages (training and consultancy, employee movement, etc). The experience of newly developing countries is reviewed with regard to FDI and technology transfer and the gaps are identified and analyzed. To address the problem the researcher proposes policy implications and framework by putting the contributors to effectively transfer technologies from FDI.

Item Type: Thesis (Masters)
Uncontrolled Keywords: Technology transfer, Foreign Direct Investment, Spillovers
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
T Technology > T Technology (General)
T Technology > TJ Mechanical engineering and machinery
Divisions: Africana
Depositing User: Andriamparany Edilbert RANOARIVONY
Date Deposited: 04 Jul 2018 10:05
Last Modified: 04 Jul 2018 10:05

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