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Foreign Investment, Technology Transfer, and the Technology Gap: A Note

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  • Tamotsu Nakamura

Abstract

The paper analyzes a simple differential game model of international technology transfer via foreign direct investment, in which a subsidiary of a multinational corporation and a host‐country firm are engaged in a technology accumulation race. In contrast to previous works, it is shown that an elasticity of the foreign firm’s marginal quasi‐rent plays a key role in determining the effects of technology spillover and of efficiency of learning activities on the technology transfer: those are positive if it is larger than unity in absolute value, and vice versa. Other comparative static results are reported.

Suggested Citation

  • Tamotsu Nakamura, 2002. "Foreign Investment, Technology Transfer, and the Technology Gap: A Note," Review of Development Economics, Wiley Blackwell, vol. 6(1), pages 39-47, February.
    • Handle: RePEc:bla:rdevec:v:6:y:2002:i:1:p:39-47
    DOI: 10.1111/1467-9361.00138
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    Cited by:

    1. Ben Hamida, Lamia & Gugler, Philippe, 2009. "Are there demonstration-related spillovers from FDI?: Evidence from Switzerland," International Business Review, Elsevier, vol. 18(5), pages 494-508, October.
    2. Rossitza B. Wooster & David S. Diebel, 2010. "Productivity Spillovers from Foreign Direct Investment in Developing Countries: A Meta-Regression Analysis," Review of Development Economics, Wiley Blackwell, vol. 14(s1), pages 640-655, August.
    3. Yong He & Hongyan Zuo & Nuo Liao, 2023. "Assessing the impact of reverse technology spillover of outward foreign direct investment on energy efficiency," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(5), pages 4385-4410, May.
    4. Fernando Ubeda & Francisco Pérez-Hernández, 2017. "Absorptive Capacity and Geographical Distance Two Mediating Factors of FDI Spillovers: a Threshold Regression Analysis for Spanish Firms," Journal of Industry, Competition and Trade, Springer, vol. 17(1), pages 1-28, March.
    5. Hamida, Lamia Ben, 2013. "Are there regional spillovers from FDI in the Swiss manufacturing industry?," International Business Review, Elsevier, vol. 22(4), pages 754-769.

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