POLICIES TO ENCOURAGE INFLOWS OF TECHNOLOGY THROUGH FOREIGN MULTINATIONALS

Do host countries aiming to maximize the inflows of technology through foreign multinationals have any policy alternatives to formal technology transfer requirements and performance requirements? To answer this question, the present paper examines some possible determinants of the technology imports of US majority-owned foreign affiliates in 33 host countries. The results show that the affiliates technology imports increase with the host countries' domestic investment levels and education levels. but that various performance requirements are negatively related to technology transfer. This suggests that policies promoting local investment, competition, and education may sometimes be alternatives or complements to formal technology transfer regulations.