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Technology Transfer and Spillovers: Does Local Participation with Multinationals Matter?


  • Blomström, Magnus

    () (The European Institute of Japanese Studies at the Stockholm School of Economics)

  • Sjöholm, Fredrik

    () (The European Institute of Japanese Studies at the Stockholm School of Economics)


This paper examines the effects on technology transfer and spillovers deriving from ownership sharing of foreign multinational affiliates. More specifically, we try to answer two questions, using unpublished Indonesian micro data. Firstly, do establishments with minority and majority ownership differ in terms of productivity levels? Secondly, does the degree of spillover differ with the degree of ownership in the FDI? Our results show that foreign establishments have comparable high levels of labor productivity and that domestic establishments benefit from spillovers. However, the degree of foreign ownership does neither affect the level of labor productivity in foreign establishments, nor the degree of spillovers.

Suggested Citation

  • Blomström, Magnus & Sjöholm, Fredrik, 1998. "Technology Transfer and Spillovers: Does Local Participation with Multinationals Matter?," SSE/EFI Working Paper Series in Economics and Finance 268, Stockholm School of Economics.
  • Handle: RePEc:hhs:hastef:0268

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    References listed on IDEAS

    1. Ramachandran, Vijaya, 1993. "Technology Transfer, Firm Ownership, and Investment in Human Capital," The Review of Economics and Statistics, MIT Press, vol. 75(4), pages 664-670, November.
    2. Blomstrom, Magnus & Kokko, Ari, 1998. " Multinational Corporations and Spillovers," Journal of Economic Surveys, Wiley Blackwell, vol. 12(3), pages 247-277, July.
    3. Magnus Blomstrom & Mario Zejan, 1989. "Why Do Multinational Firms Seek Out Joint Ventures?," NBER Working Papers 2987, National Bureau of Economic Research, Inc.
    4. Fredrik Sjoholm, 1999. "Technology gap, competition and spillovers from direct foreign investment: Evidence from establishment data," Journal of Development Studies, Taylor & Francis Journals, vol. 36(1), pages 53-73.
    5. Sjoholm, Fredrik, 1999. "Productivity Growth in Indonesia: The Role of Regional Characteristics and Direct Foreign Investment," Economic Development and Cultural Change, University of Chicago Press, vol. 47(3), pages 559-584, April.
    6. Ari Kokko, 1996. "Productivity spillovers from competition between local firms and foreign affiliates," Journal of International Development, John Wiley & Sons, Ltd., vol. 8(4), pages 517-530.
    7. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
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    More about this item


    Joint venture; productivity; spillovers; Indonesia; foreign direct investment;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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