Multinational Corporations and Technology Transfers in Developing Countries

Kevin Honglin Zhang () and Zhongxiu Zhao ()
Additional contact information
Kevin Honglin Zhang: Illinois State University, Department of Economics, Postal: 100 N University St # 142, Normal, IL 61761-4402, USA, http://www.cob.ilstu.edu/
Zhongxiu Zhao: University of International Business and Economics, School of International Trade and Economics, Beijing, China, Postal: o. 10, Huixin Dongjie, Chaoyang District, Beijing, China, http://www.uibe.edu.cn/

Economia Internazionale / International Economics, 2007, vol. 60, issue 2, 249-264

Abstract: Technology and innovatory capabilities are key sources of competitive strength for firms and countries. As a developing country, China seems to build its capabilities for technology and innovation through foreign direct investment (FDI) by multinational corporations. Do multinational corporations transfer technology? While the topic is quite important, the quantitative analyses on the issue in the literature have been limited. This paper attempts to close the gap by empirically investigating the issue with the Chinese industrial data. The estimates indicate that the Chinese industries benefit from the presence of FDI mainly from spillovers and no obvious technology transfers are made directly from multinational corporations. The results also suggest a key role of an industry’s absorptive capability in capturing potential benefits from FDI.

Keywords: Multinational corporations (MNCs); FDI; Technology spillovers (search for similar items in EconPapers)
JEL-codes: F21 F23 O30 O53 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (2)

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