Foreign Firms, Technological Capabilities and Economic Performance

This book employs novel techniques to compare technological capabilities and economic performance in seven countries at varying stages of industrial development: Brazil, Costa Rica, Indonesia, Kenya, Malaysia, South Africa and Uganda. The author uses a methodology drawn from the technology capability framework, but extensively adapts and simplifies it to extract common cross-industry parameters for statistical analysis. He employs the framework to compare the technological, local sourcing and performance dynamics of foreign and local firms in a variety of industries. The results offer a common synthesis and fresh ideas on the importance of foreign firms in technological capability building and economic performance in developing countries. They reveal that although foreign firms tend to enjoy higher human resource and process technology capabilities in the most underdeveloped economies, in the more advanced nations this comparative advantage is significantly eroded. The author shows how the institutional and systemic strength of a country can help to explain the level of participation of foreign firms in R&D activities. He also identifies domestic and regional markets, infrastructure, incentives, natural resources and human capital as important factors in stimulating significant R&D investment by foreign firms.This interesting and well-written book presents an original examination of the dynamic relationship between foreign firms, technology, innovation and economic performance in Asia, Africa and Latin America. Academics, policymakers and NGOs interested in development economics, technology policy and trade will find this to be an extremely valuable resource.