TY  - JOUR
AU  - Blomstrom,Magnus
AU  - Wang,Jian-Ye
TI  - Foreign Investment and Technology Transfer:  A Simple Model
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2958
PY  - 1992
Y2  - July 1992
UR  - http://www.nber.org/papers/w2958
L1  - http://www.nber.org/papers/w2958.pdf
N1  - Author contact info:
Magnus Blomstrom
European Institute of Japanese Studies
Stockholm School of Economics
Post Office Box 6501, Sveavagen 65
S-113 83 Stockholm
 SWEDEN
Tel: 46-8-7369265
Fax: 46-8-313017
E-Mail: magnus.blomstrom@gmail.com
AB  - This paper develops a model in which international technology transfer through foreign direct investment emerges as an endogenized equilibrium phenomenon, resulting from the strategic interaction between subsidiaries of multinational corporations and host country firms. The model explicitly recognizes two types of costs -- the costs to the multinational of transferring technology to its subsidiaries and the learning costs of domestic firms -- and treats technology transfer in a game theoretic context. The model points to the importance of the learning efforts of host-country firms in increasing the rate at which MNCs transfer technology. The paper also explores some of the reasons why learning investment in host country firms may be suboptimal.
ER  -