Foreign Investment and Technology Transfer: A Simple Model

Magnus Blomstrom and Jian-Ye Wang

No 2958, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper develops a model in which international technology transfer through foreign direct investment emerges as an endogenized equilibrium phenomenon, resulting from the strategic interaction between subsidiaries of multinational corporations and host country firms. The model explicitly recognizes two types of costs -- the costs to the multinational of transferring technology to its subsidiaries and the learning costs of domestic firms -- and treats technology transfer in a game theoretic context. The model points to the importance of the learning efforts of host-country firms in increasing the rate at which MNCs transfer technology. The paper also explores some of the reasons why learning investment in host country firms may be suboptimal.

Date: 1989-05
Note: ITI IFM
References: Add references at CitEc
Citations: View citations in EconPapers (138)

Published as European Economic Review, Vol. 36, pp. 137-155, (1992).

Downloads: (external link)
http://www.nber.org/papers/w2958.pdf (application/pdf)

Related works:
Journal Article: Foreign investment and technology transfer: A simple model (1992)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:2958

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w2958

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().