Relationship between FDI, foreign ownership restrictions, and technology transfer in the resources sector: A derivation approach (2024)

FAQs

What is the relationship between FDI and technology? ›

The inflow of FDI brings financial capital, new technology and knowledge. Also, FDI promotes the manufacture of high-tech and high-quality products. It has also contributed to the production of value-added export products through multinational companies' participation.

To effectively leverage FDI as a means to achieve technology transfer and diffusion, developing countries need to establish an effective national innovation system (NIS) which provides an interface for technology-related TNC activity, supports the development of the absorptive capacities of domestic enterprises and ...

FDI allows the transfer of technology—particularly in the form of new varieties of capital inputs—that cannot be achieved through financial investments or trade in goods and services. FDI can also promote competition in the domestic input market.

Lall and Narula (2004) point out that FDI transfers technology to local firms in four ways: backward linkages, labor turnover, forward linkages, and international technology spillovers.

Technology and International Relations emphasizes the importance of leadership styles, domestic political agendas and the relative weight of technologically driven countries in global affairs.

Science and technology influence international affairs by many different mechanisms. Both create new issues, risks and uncertainties. Advances in science alert the international community to new issues and risks. New technological capabilities transform war, diplomacy, commerce, intelligence, and investment.

Transfer of Technology for Development in Times of Accelerating Change: New perspectives for the multilateral framework. Technological learning and innovation are essential for structural transformation and productive capacity development and therefore for long-term improvements in income and living standards.

Technology transfer is important to ensure that the company's innovation becomes commercialized. This helps early-stage intellectual property to become tools for research. It can also be used as a base for new products and services for public use.

The movement of scientific methods of production or distribution from one enterprise, institution or country to another, as through foreign investment, international trade, licensing of patents rights, technical assistance or training.

In economics, it is widely accepted that technology is the key driver of economic growth of countries, regions and cities. Technological progress allows for the more efficient production of more and better goods and services, which is what prosperity depends on.

How technology is transferred to developing countries? ›

Channels of Technology Transfer

Numerous channels exist through which ITT may occur. Trade in goods and services is one. All exports bear some potential for transmitting technological information. Imported capital goods and technological inputs can directly improve productivity by being used in production processes.

Technology transfer is the movement of data, designs, inventions, materials, software, technical knowledge or trade secrets from one organisation to another or from one purpose to another. The technology transfer process is guided by the policies, procedures and values of each organisation involved in the process.

The two most common types of control exercised by host governments to restrict FDI are: (1) ownership restraints, often in the form of excluding foreign firms from specific fields or limiting foreign ownership stake in local subsidiaries, and (2) performance requirements related to local content, exports, technology ...

The main factors affecting foreign direct investment (FDI) in India include government policies and regulations, infrastructure development, political stability, market size and potential, and the ease of doing business.

FDI is a significant variable in the model which indicates that 1% increase in FDI will lead to 0.25% increase in exports with one year time gap. Granger Causality Test indicates that there is a unilateral relationship between exports and FDI and the direction is from FDI to exports (Table 15).

Globalization Increases International Investing

Globalization and international investment are tied together and lead into one another as companies act internationally by increasing their international investment out of mutual interest and the need to stay internationally competitive.