Technology transfer to developing countries : a quantitative approach

Abstract

Technology transfer is extensively believed to be one of the major debates in the literature ondevelopment economics. The experiences of some successful countries in rapid economic andindustrial development, in particular, some East-Asian Newly Industrialised Countries (NICs)show that the acquisition of a significant amount of foreign technology has played a crucial role.This crucial role includes promoting their managerial and technical expertise as well asincreasing their productivity level through the adoption of a set of appropriate policies andstrategiesT. hesee xperiencesc ould have valuable lessonsf or other countriesw ho wish to followsimilar strategies to achieve rapid industrialisation and technological development.Although many Less Developed Countries (LDCs) have realised the great importance oftechnological transformation for their rapid economic and industrial development, they have notdesigned effective and efficient policies for the transfer of appropriate and high-leveltechnologies.The present empirical investigation is intended to contribute to the large existing literature ontechnological transfer and the role that Multinational Corporations (MNCs) play in this. Itsmajor contribution lies in demonstrating rigorously that the integration of foreign technologies isgreatly affected by the socio-economic conditions of the recipient countries.The present study attempts to identify the main socio-economic characteristics of countriesinvolved in assimilating transferred technology. It first identifies the critical success or failurefactors for effective technology transfer and the rapid industrialisation of the LDCs in general.Then, it provides a quantifiable metric index of the rate of the technological absorption.Selectiono f relevant variablesa nd choosingt he sampleo f countries are summarisedT. he model,which is based on the multiple regression analysis as well as other statistical techniques, isidentified.The four-variable-model derived from the stepwise regression results gave a statisticallysignificant R-sq = 70.71% and R-sq (adj) = 66.7% and satisfies the principle of parsimony, waschosen as the preferred model. This has as explanatory variables transport and communicationsand gross national savings as economic indicators - Christian religion and natural disasters (negative concept) as social indicators. The results suggest that countries with the aboveindicators are more able to absorb and integrate foreign technologies. In general, the resultsreveal that the rate of technology integration varies greatly with the level of socio-economicdevelopment.Some intangible factors that cannot as yet be quantified and may be expected to have significanteffects on the rate of technological integration, such as political and managerial factors arediscussed.The analysis of results is concludedw ith somer ecommendationsa nd suggestionsd erived fromthe research findings and results for the effective and successful technology transfer of LDCsalong with the technology transfer in Africa, problems of AIDS and its impact on Africandevelopment