Technological Activities of Less-Developed-Country-Based Multinationals

Abstract

In recent years firms in developing countries have begun to undertake direct investments abroad. Their competitive advantage over other multinational enterprises, locally owned firms, and imports lay in their possession of proprietary technology that cannot be transferred via the market developed in response to factor market and demand conditions in their home country. This technology was appropriate to the host country environment: labor-intensive, flexible between products and processes, operated at high rates of capacity utilization, and intensive in the use of locally produced inputs. These investments have typically been motivated by rising labor costs at home and threats to export markets both in the host country and in third country markets.