Outward FDI from Developing Country MNEs as a Channel for Technological Catch-Up

Seoul Journal of Economics, Vol. 23, No. 2, Summer 2010

23 Pages Posted: 11 May 2010

See all articles by Alessia A. Amighini

Alessia A. Amighini

Università del Piemonte Orientale; Catholic University of the Sacred Heart of Milan

Roberta Rabellotti

University of Pavia

Date Written: May 9, 2010

Abstract

One of the more recent aspects of the globalization process is the rise and the increasing outward expansion of multinational enterprises (MNEs) from developing countries. Among the more promising effects of this phenomenon is a potentially positive development impact: through outward foreign direct investment (OFDI) developing country MNEs acquire new knowledge, which contributes to the technological catch-up of their home countries. This paper reviews the recent literature on OFDI from developing countries, with a critical focus on the theory and evidence of FDI as a channel for technological catch-up. This literature suggests that the features and global business environment of current emerging country MNEs is different from those of latecomer firms in earlier decades. Modularity of production in an increasing number of sectors, combined with weak national innovation systems (NIS) in many developing countries explain why the sourcing of strategic assets – including technology and innovation – from abroad through OFDI has become such an important channel for technological catch-up.

Suggested Citation

Amighini, Alessia A. and Rabellotti, Roberta, Outward FDI from Developing Country MNEs as a Channel for Technological Catch-Up (May 9, 2010). Seoul Journal of Economics, Vol. 23, No. 2, Summer 2010, Available at SSRN: https://ssrn.com/abstract=1603569 or http://dx.doi.org/10.2139/ssrn.1603569

Alessia A. Amighini

Università del Piemonte Orientale ( email )

Via Perrone 18
28100 Novara
Italy

Catholic University of the Sacred Heart of Milan ( email )

Largo Gemelli, 1
Via Necchi 9
Milan, MI 20123
Italy

Roberta Rabellotti (Contact Author)

University of Pavia ( email )

Corso Strada Nuova, 65
27100 Pavia, 27100
Italy

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