into an economy. There are, however, significant equity, sovereignty, and
participation costs that must be borne by the developing country in return
for the technology. The presence of TNCs within developing economies has
been found by the studies reviewed above to result generally in greater product variety, better quality, more efficient utilization of process technology,
better training of local workers in modern technical skills, and a greater
commitment to R&D than is typical of local enterprises.
The terms "transnational corporation" (TNC), "multinational enterprise" (MNE),
and "multinational corporation" (MNQ are used interchangeably in this chapter to
refer to any large corporation based in an industrialized country with production,
service, and/or processing facilities located in several foreign countries. These
foreign facilities may be owned wholly or in part by the "parent" corporation, leased
by it, or operated under license or contract with little or no cross-border ownership
Jaleel Ahmad, Import Substitution, Trade and Development ( Greenwich, Conn.: JAI Press, 1978), p. 4.
William A. Fischer, "Empirical Approaches to Understanding Technlogy
Transfer," R&D Management 6 ( 1976), 7-13; and David J. Teece, The Multinational
Corporation and the Resource Cost of International Technology Transfer
( Cambridge, Mass.: Ballinger, 1977).
Paul H. Douglas, America in the Market Place ( New York: Holt, Rinehart and
Winston, 1966). p. 52.
John H. Dunning, International Production and the Multinational Enterprise
( London: George Allen & Unwin, 1981), p. 359.
V. W. Ruttan and
Y. Hayami, "Technology Transfer and Agricultural
Development," Technology and Culture, Part I 14:2 ( 1973), 24-31.
Erik A. Haeffner, "The Innovation Process," Technology Review, March-
April 1973, 19-26.
Daniel V. De Simone (for the Panel on Invention and Innovation),
Department of Commerce, Technological Innovation: Its Environment and Management ( Washington, D.C.: U.S. Government Printing Office, 1967).
Jack N. Behrman and
William A. Fischer, "Transnational Corporations:
Market Orientations and R&D Abroad," Columbia Journal of World Business 15
(Fall 1980), 55-60.
William A. Fischer, Postwar Japanese Technological Growth and Innovation:
A Comparative Review of the Literature ( Washington, D.C.: The Program of Policy
Studies in Science and Technology, The George Washington University, 1974).
Hubert Schmitz, "Industrialization Strategies in Less Developed Countries:
Some Lessons of Historical Experience," The Journal of Developing Studies 21 ( October 1984), 13.