Foreign Direct Investment and International Technology Transfer to Egypt

Mohamed Kadah

No 317, Working Papers from Economic Research Forum

Abstract: While technology has been gaining importance as a vital factor of competitiveness in the world economy, intra-firm technology transfer through foreign direct investment (FDI) has become the predominant channel of international technology transfer (ITT), with other non-FDI forms of ITT losing impact. Though it comes second to contractual licensing, as a viable tool of domestic technological development, FDI can have important technological spillovers in host economies, especially if it takes a joint-venture form subject to local control. Unfortunately, due to dire need for capital finance and/or absence of appropriate national technology policies, most host developing countries focus on maximising the quantity of their FDI inflow, while underestimating the importance of the quality of technologies transferred through FDI. However, competitive technology has become a basic prerequisite for economic development and growth, and developing countries such as Egypt should try to achieve the best possible technological gains from FDI.

Pages: 22 pages
Date: 2003-12-06, Revised 2003-12-06
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Published by The Economic Research Forum (ERF)

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