Technology transfer by transnational corporations: A discussion of the importance of cooperative arrangements in foreign direct investment

Abstract

Foreign direct investment (FDI) is recognized by many economic actors, and particularly by the State as a relevant factor of economic growth. One aspect that supports this statement is that, for these investments, there is a technology transfer between countries that promotes increased productivity at the microeconomic level and generates a “competitiveness shock” for local businesses. From the internationalization process of capitalist economies since the 80s and 90s, new opportunities for exchange (and markets for achievements) of the operations of Transnational Corporations (TNC) through FDI have been intensified. The technological transfers were carried out by horizontal and vertical FDI, with both positive and negative aspects in this process. The major problem in this research will be the identification of these significant positive and negative aspects of FDI under the flows operated by TNC. To this end, the literature points to the transfer of technology to the recipient economies and to the role of government policy. It is done through a literature review and descriptive research.