Technological Leadership And Foreign Investors Choice Of Entry Mode

Developing country governments tend to favor joint ventures over other forms of foreign direct investment, believing that local participation facilitates the transfer of technology and marketing skills. However, foreign investors who are technological or marketing leaders in their industries are more likely to invest in wholly owned projects than to share ownership. Thus in R&D-intensive sectors joint ventures may offer less potential for transferring technology and marketing techniques than wholly owned subsidiaries.

Developing country governments tend to favor joint ventures over other forms of foreign direct investment, believing that local participation facilitates the transfer of technology and marketing skills. However, foreign investors who are technological or marketing leaders in their industries are more likely to invest in wholly owned projects than to share ownership. Thus in Ramp;D-intensive sectors joint ventures may offer less potential for transferring technology and marketing techniques than wholly owned subsidiaries.Developing country governments tend to favor joint ventures over other forms of foreign direct investment, believing that local participation facilitates the transfer of technology and marketing skills. Smarzynska assesses joint ventures' potential for such transfers by comparing the characteristics of foreign investors engaged in joint ventures with those of foreign investors engaged in wholly owned projects in transition economies in the early 1990s.Unlike the existing literature, Smarzynska focuses on intra-industry differences rather than interindustry differences in Ramp;D and advertising intensity. Empirical analysis shows that foreign investors who are technological or marketing leaders in their industries are more likely to invest in wholly owned projects than to share ownership. This is true in high- and medium-technology sectors but not in industries with low Ramp;D spending.Smarzynska concludes that it is inappropriate to treat industries as homogeneous in investigating modes of investment. She also suggests that in sectors with high Ramp;D spending joint ventures may present less potential for transfer of technology and marketing techniques than wholly owned subsidiaries.This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to study the contribution of trade and foreign direct investment to technology transfer.

The importance of international technology diffusion (ITD) for economic development can hardly be overstated. Both the acquisition of technology and its diffusion foster productivity growth. Developing countries have long sought to use both national policies and international agreements to stimulate ITD. The 'correct' policy intervention, if any, depends critically upon the channels through which technology diffuses internationally and the quantitative effects of the various diffusion processes on efficiency and productivity growth. Neither is well understood. New technologies may be embodied in goods and transferred through imports of new varieties of differentiated products or capital goods and equipment, they may be obtained through exposure to foreign buyers or foreign investors or they may be acquired through arms-length trade in intellectual property, e.g., licensing contracts. 'Global Integration and Technology Transfer' uses cross-country and firm level panel data sets to analyze how specific activities exporting, importing, FDI, joint ventures impact on productivity performance.

When technology transfer is costly, a foreign firm and host country government may differ in their preferences over direct entry and acquisition. Government intervention could help induce the socially preferred choice.

Integration into the production and marketing arrangements of multinational corporations may offer many benefits to transition economies that, after a long period of isolation, have liberalized trade and investment. The fragmentation of production offers a unique opportunity for producers in developing countries to move from servicing small local markets to supplying large firms abroad and, indirectly, their customers all over the world.

A collection of papers on the determinants and consequences of foreign direct investment (FDI) in the real and financial sectors of industrial countries. The text sheds new light on the determinants of FDI, in particular the role of governmental incentives. Another main topic is the role of FDI in the east European accession countries. It provides insights into the question of whether EU enlargement will have consequences for capital flows into those countries. Since the start of European monetary union, the discussion on cross-border mergers in the European banking industry has intensified. The final part of the book contains contributions to this debate.

ICT for education is a rapidly evolving and high-priority development area. This guide stresses the importance of a holistic good practice framework in which ICT for education issues are pursued through three interrelated perspectives: (i) national perspective, (ii) education sector perspective, and (iii) education institution and school perspective. The guide draws on a range of sources, including the findings of ADB’s studies on ICT for education and the experience ADB has gained with stakeholders and partners in providing project assistance for ICT for education in its developing member countries.