FDI and Technology as Levering Factors of Competitiveness in Developing Countries

Abstract

Technology creation and absorption are two relevant processes that affect the role that multinational enterprises (MNE) may play in the competitiveness improvement of the developing economies. The importance of internal factors in local contexts, the increasing integration in the industrial international value chain and the access of firms from these countries to diverse external learning sources, constitute a suitable framework for the analysis of competitiveness shift. In this paper, we study how the integration of firms from developing countries in sophisticated high-tech markets can be defined by the combined action of MNE and the ability for technology absorption and creation. Our empirical analysis with panel data shows how the different dimensions of internal and external factors affect international competitiveness in high-tech industries.