The Theoretical Framework: FDI and Technology Transfer

Björn Jindra

Chapter 2 in Technology Transfer via Foreign Direct Investment in Central and Eastern Europe, 2006, pp 6-29 from Palgrave Macmillan

Abstract: Abstract Chapter 2 introduces the theoretical framework which has developed around the topic of technology transfer via FDI. After some basic definitions and a short overview of the theory of the multinational enterprise (MNE), this chapter focuses on the channels and determinants of technology transfer via inward FDI. At the end of the chapter a classification of determinants into host country-, industry-, MNC- and subsidiary-specific factors in relation to technology transfer types is developed. Unlike portfolio- investment, FDI is a long-term oriented investment abroad with the main objective of the investor being to gain a significant impact on the company’s decision making processes (Krugman and Obstfeld, 2000: 169). According to the International Monetary Fund (IMF), a significant impact is possible when the foreign investor holds a share of at least 10 per cent of the nominal capital.

Keywords: Host Country; Technology Transfer; Absorptive Capacity; Transition Country; Foreign Subsidiary (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:pal:stuchp:978-0-230-52448-4_2

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DOI: 10.1057/9780230524484_2

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