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Tech Donation of MNCs To Developing Countries Essay

Assignment id 1004268
Discipline Other
Assignment type Essay
Words 1093
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In recent financial climate the link between technology transfers and Foreign Direct Investment seems to be essential for the Multinational Corporations. The most important objective of MNCs is to maximize its own gains. This requires them to create the goods and services at the lowest possible cost (fixed and variable) by harnessing the resources of the developing countries apart from their residence nation (Pool and Stamos 1990). The channels of international technology transfer and also their importance of growth are studies extensively in 1990s. The research identifies three principal channels of international technology spillovers. The first is that the direct transfer of technologies through international licensing arrangement (Eaton and Kortum 1996) to the contrary this source is considered less prominent since most valuable technologies are not available on license (World Investment Report 2000). The second is FDI from developed nations to developing nations as it is considered the cheapest and most reliable technique as a spillover (Blomström and Kokko 1997). The next is technology transfer through global trade where import and export of intermediate goods and capital products are traded (Markusen 1989, Clerides, Lach and Tybout 1997). On the flip side, it's seen that MNCs do not encourage spillovers because of (a) transmission of technologies for their subsidiaries abroad. (b) Technologies that doesn't support the server country’s environment. (c) Maintain a control over the technology by reducing the spillovers and encouraging import. (d) Maintaining advanced technology than developing countries through Intellectual Property Rights (Aitken and Harrison et al. 1999). As an emerging market, India has a massive presence of multinational corporations...

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