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Foreign-owned firms and technological capabilities in the Argentinean manufacturing industry

Listed author(s):
  • Costa, Ionara



  • Marin, Anabel


    (University of Sussex, SPRU)

This deals with the technological development implications of the substantial and long-dated presence of foreign-owned affiliates in the Argentinean manufacturing industry. It put forward the argument that the learning process of foreign-owned firms should be central in the analysis of the technological impacts of inward FDI. In other words, FDI impacts to host economies are dependent not exclusively on the technology and knowledge that multinational corporations are willing to transfer to their overseas affiliates, nor on the absorptive capacity of domestic firms. Instead, the technological learning that takes place within the foreign-owned firms is crucial. In order to shed some light on the level of learning reached by foreignowned firms integrating the Argentinean economy, this paper analyses the technological profiles of MNC affiliates in the manufacturing industry, and compares them with those of domestically-owned firms. This analysis is based on proxies for different levels of technological capabilities, calculated by means of the second Argentinean innovation survey, which was carried out by INDEC, the Argentinean National Council of Statistics, for the period 1998-2001. The analysis suggests that foreign-owned affiliates seem to play an important role in terms of diffusion of technologies generated elsewhere. Yet, the results are not so clear when the local generation of knowledge and technology is considered. In general terms, the analytical exercise made here suggests reasonable development of operational capabilities, coupled with shallow interaction, monitoring, improvement and generation capabilities both by foreign affiliates and domestics firms. In other words, the findings suggest the accumulation of substantial capabilities for using existing technologies, but only meagre capabilities for locally-generated new ones.

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Paper provided by United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) in its series MERIT Working Papers with number 036.

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Date of creation: 2007
Handle: RePEc:unm:unumer:2007036
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  1. Lall, Sanjaya, 1992. "Technological capabilities and industrialization," World Development, Elsevier, vol. 20(2), pages 165-186, February.
  2. Narula Rajneesh & Marin Anabel, 2003. "FDI spillovers, absorptive capacities and human capital development: evidence from Argentina," Research Memorandum 018, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  3. Costa, Ionara & de Queiroz, Sergio Robles Reis, 2002. "Foreign direct investment and technological capabilities in Brazilian industry," Research Policy, Elsevier, vol. 31(8-9), pages 1431-1443, December.
  4. Mario Cimoli & Jorge Katz, 2003. "Structural reforms, technological gaps and economic development: a Latin American perspective," Industrial and Corporate Change, Oxford University Press, vol. 12(2), pages 387-411, April.
  5. Costa, Ionara & Filippov, Sergey, 2007. "A New Nexus Between Foreign Direct Investment, Industrial and Innovation Policies," MERIT Working Papers 030, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
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