Conclusions on the Technological Role of FDI into CEE

Before economies that are catching up in terms of technological development can feed the process of technical advance from their own indigenous resources, they will typically depend on the supply of technology from abroad, that is technological diffusion and imitation. FDI is the most important driver of supply of external technology. This is generally assumed for the newly industrialised countries in Asia and other emerging markets, and has also proven to be the case amongst some of the West European countries in their own processes of catching up (see for example Jungmittag, 2005). There is, however, a controversy about whether FDI has in fact had a benign effect for economic development or not. Even if the literature does on average agree that FDI has positively contributed to technological advance and economic growth (for comprehensive overviews see for example Moran et al., 2005; Rugman and Doh, 2008), many important qualifications can be found in the literature that are convincing and appear to be empirically robust. The final word on the developmental role of TNCs is hence not out yet, and may never be due to issues like heterogeneity and context-specificity.