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Home > Data & Research > Research > Programs > Trade Research

Technological leadership and foreign investors' choice of entry mode, Volume 1

Author:	Smarzynska, Beata K.;	Collection Title:	Policy, Research working paper ; no. WPS 2314
Date Stored:	2000/05/02	Document Date:	2000/04/30
Document Type:	Policy Research Working Paper	Language:	English
Major Sector:	Finance	Report Number:	WPS2314
Sub Sectors:	Other Finance	SubTopics:	International Terrorism & Counterterrorism; Water and Industry; Banks & Banking Reform; Health Monitoring & Evaluation; Public Health Promotion; Agricultural Knowledge and Information Systems
Volume No:	1

Summary: Developing country governments tend to favor joint ventures over other forms of foreign direct investment, believing that local participation facilitates the transfer of technology, and marketing skills. The author assesses joint ventures' potential for such transfers by comparing the characteristics of foreign investors engaged in joint ventures with those of foreign investors engaged in wholly owned projects in transition economies in the early 1990s. Unlike the existing literature, the author focuses on intra-industry differences rather than inter-industry differences in research and development, and advertising intensity. Empirical analysis shows that foreign investors who are technological, or marketing leaders in their industries, are more likely to invest in wholly owned projects than to share ownership. This is true in high- and medium-technology sectors, but not in industries with low research and development spending. The author concludes that it is inappropriate to treat industries as homogeneous in investigating modes of investment. She also suggests that in sectors with high research and development spending, joint ventures may present less potential for transfer of technology, and marketing techniques than wholly owned subsidiaries.


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File Type		Description	File Size (mb)

	PDF 38 pages	Official version*	2.66 (approx.)
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	PDF 32 pages	WPS2314	0.21

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