FOREIGN DIRECT INVESTMENT AND TECHNOLOGY TRANSFER IN DEVELOPING COUNTRIES

Hamisu Ibrahim

Department of Business Administration

Kwararafa University, Wukari, Taraba State

E-mail: hameezabc@yahoo.com

Abstract

The study of foreign direct investment (FDI) and transfer of technology   have been a great interest area for academics, policy maker, and industries in both developed and developing countries. There is an increased level of link between foreign direct investment and technology transfer made by Multinational Corporation in developing countries and it widely believed that FDI help to transfer technology to the benefit of the domestic industries. But the findings of the paper shows that this benefit does not automatically accrue but rather technology is transferred to local industries with strong absorptive capability via spill over’s rather than via direct effect. It further shows that there is lack of link between diffusion and rooting of technology in developing countries and this major constraint hampered the recipient country’s ability to assimilate, transform and develop the technology. Based on these findings, the following recommendations were made: That comity of nations under the auspices of the United Nation should establish an international organization for collecting and distributing technological information as well as of the need to create effective international bodies for education and training. Also developing countries should encourage Greenfield’s ventures and acquisition and placed less emphasis on other entry mode like joint venture, franchising, licensing.