The Selection of Technology: A Continuing Dilemma

Mason, R. Hal
June 1974
Columbia Journal of World Business;Summer74, Vol. 9 Issue 2, p29
Academic Journal
Large Multinational or internationally engaged firms are a major source of technology and have become key transfer agents and they tend to prefer direct foreign investment as the method of transfer. In many instances, the transferred technologies were designed for large markets, which have an abundance of capital and high-level labor skills. In the developing countries, these conditions often do not prevail, i.e., markets are small and capital and skills are scarce. Thus, economic theory suggests that these firms should adapt their techniques when investing in developing countries and should use much less capital per man than they do in advanced countries. Yet, differences in capital to labor ratios are not as great as might be expected when the developing countries' manufacturing sectors are compared with the same sectors in advanced countries.


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