The Capital Intensity of Technology and Foreign Direct Investment in the Third World: An Empirical Analysis

Richard Cebula () and Ira S. Saltz ()
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Ira S. Saltz: College of Business Administration University of Central Arkansas, Postal: 201 Donaghey Avenue Conway, AR 72035 USA, http://www.uca.edu/

Economia Internazionale / International Economics, 1993, vol. 46, issue 4, 345-359

Abstract: This paper tests the hypothesis that the presence of foreign direct investment (fdi) raises the capital-intensity of technology in the Third World. If this hypothesis is accepted, it may he because multinationals (MNCs) adopt a more capital-intensive technology or because mnc's might tend to invest in the more capital-intensive sectors of manufacturing. Evidence presented in this paper shows that the capital-intensity of technology is a positive function of the level of fdi, but the evidence is inconclusive that MNCs tend to invest more in the relatively capital-intensive sectors of manufacturing.

Date: 1993
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ecoint:0431

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