Foreign-owned firms and technological capabilities in the Argentinean manufacturing industry
Ionara Costa & Anabel Marin
#2007-036
This deals with the technological development implications of the
substantial and long-dated presence of foreign-owned affiliates in the
Argentinean manufacturing industry. It put forward the argument that the
learning process of foreign-owned firms should be central in the
analysis of the technological impacts of inward FDI. In other words, FDI
impacts to host economies are dependent not exclusively on the
technology and knowledge that multinational corporations are willing to
transfer to their overseas affiliates, nor on the absorptive capacity of
domestic firms. Instead, the technological learning that takes place
within the foreign-owned firms is crucial. In order to shed some light
on the level of learning reached by foreignowned firms integrating the
Argentinean economy, this paper analyses the technological profiles of
MNC affiliates in the manufacturing industry, and compares them with
those of domestically-owned firms. This analysis is based on proxies for
different levels of technological capabilities, calculated by means of
the second Argentinean innovation survey, which was carried out by
INDEC, the Argentinean National Council of Statistics, for the period
1998-2001. The analysis suggests that foreign-owned affiliates seem to
play an important role in terms of diffusion of technologies generated
elsewhere. Yet, the results are not so clear when the local generation
of knowledge and technology is considered. In general terms, the
analytical exercise made here suggests reasonable development of
operational capabilities, coupled with shallow interaction, monitoring,
improvement and generation capabilities both by foreign affiliates and
domestics firms. In other words, the findings suggest the accumulation
of substantial capabilities for using existing technologies, but only
meagre capabilities for locally-generated new ones.
Key Words: Foreign-owned affiliates; Manufacturing industry;
Technological Capability; Innovation Survey; Composite Index; Argentina
JEL Codes: C49, F23, F29, L29, L60, 033, 039