|
|
|
|
Title: |
Foreign Investment, Technology Transfer and
Foreign Capital Impact Function |
| Author: |
Tsai, Pan-Long |
| Author
Affiliation: |
Natl Tsing Hua
U |
| Source: |
International Economic Journal, Summer 1989, v. 3, no. 2, pp. 43-56 |
|
Publication Date: |
Summer 1989 |
|
Abstract: |
The paper analyzes the optimal capital
accumulation of a small open economy by incorporating the impact of
technology transfer that accompanies foreign investment. Assuming that
technology transfer depends on the extent of foreign ownership, it is
shown that, whenever there is technology transfer through foreign
participation, the optimal rule suggests that a host country maintain
some foreign capital in the steady state. The concept of the foreign
capital impact function is introduced to capture possible negative
effects in addition to the positive effects of foreign investment. The
impact of foreign investment is shown to involve an externality, calling
for government intervention for a social optimum. |
|
