Inflows of Foreign Technology and Indigenous Technological Development

Abstract

This paper explores the effects of inflows of foreign technology on technological development in developing countries. It evaluates the existing literature exploring this issue and indicates directions for further research. In particular, we argue that the implications of the theory of foreign direct investment (the dominant channel of international technology transfer) for technological development have not been fully explored. Dynamic analyses of technology transfer that accommodate the salient features of developing countries have also begun to appear only recently. Further work along these lines is likely to yield rich dividends.

JEL Classification: O14, O31, O38