Foreign direct investment through acquisitions and implications for technological upgrading: Case evidence from Tanzania
Portelli, Brian and Narula, Rajneesh (2004). Foreign direct investment through acquisitions and implications for technological upgrading: Case evidence from Tanzania. UNU-MERIT Research Memoranda. UNU-MERIT.
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Sub-type Working paper Author Portelli, Brian
Narula, RajneeshTitle Foreign direct investment through acquisitions and implications for technological upgrading: Case evidence from Tanzania Series Title UNU-MERIT Research Memoranda Volume/Issue No. 8 Publication Date 2004 Publisher UNU-MERIT Language eng Abstract Using a case-study approach, this study examines the role of privatisation on the industrial landscape of Tanzania. We examine the impact of FDI through acquisitions on technology transfer within the acquired firm as well as the development of linkages to other firms based in the host country. Our results suggest that technological upgrading has occurred following FDI, the intensity of which reflects the type of firm-specific assets of parent MNE, as well as the pre-acquisition state of these industrial activities. Improved backward linkages are also evident with local economic agents, but their type and extent ' reflecting Tanzania's comparative advantage in the primary sector - confirm that capabilities both within the acquired firms and also in the industrial base of the host country greatly influence the magnitude and intensity of technological upgrading. 'Narrower' technology gaps between the MNE affiliate and the domestic sector are more likely to result in backward linkages and determine the type of technological content of inputs sourced locally rather than within the MNE. Copyright Year 2004 Copyright type All rights reserved -
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