Geography Reference
In-Depth Information
whereby technology transfer is understood as the reception and utilization
by one country of technology developed in another (Graham 1982). In
particular, MNEs have been a major source of technology transfer to
developing countries, since these countries commonly face structural
constraints in terms of finance, technology, marketing and management
(Radosevic 1999c). MNEs influence host economies through a wide
array of formal (e.g., R&D generation) and informal mechanisms such as
technical assistance to local companies, knowledge and skills acquisition
by local personnel working for the MNE, imitation of new technologies
by domestic firms, etc. (e.g., Caves 1974; Grossman and Helpman 1991;
Dunning 1994; Blomström and Kokko 1998; Radosevic 1999; Pietrobelli
2000; Padilla-Perez 2006; Iammarino et al. 2008; Saliola and Zanfei 2009).
On the other hand, in the short- and even long-term in many cases, such
technological and knowledge resources cannot be internally generated
by a developing economy. As seen in Chapters 4 and 5, the absorption,
adaptation and improvement on foreign technologies are not automatic
and costless processes. Firms and local organizations must engage in
deliberate and integrated efforts and devote substantial resources to start
up and sustain a gradual process of knowledge accumulation which is con-
ducive to technological capability building (e.g., Pietrobelli 1994; Young
et al. 1994; Hobday 1995; O'Donnell and Blumentritt 1999; Narula and
Dunning, 2000; Narula 2004.). Therefore, identifying the pattern and
nature of MNE investment flows is crucial in determining the long-run
growth trajectories of emerging economies in the modern global economy.
8.3
THE BRIICS COUNTRIES
As both their levels of global inter-connectedness and knowledge-related
activities grows, at least partly in response to MNE investments, the group
of emerging economies known as the BRIICS economies is experienc-
ing an ever-increasing role in the global economy over the twenty-first
century. The six BRIICS countries of Brazil, Russia, India, Indonesia,
China and South Africa appear to be a rather diverse group of nation
states, although to some extent they share several common economic and
structural features. Firstly, these are the world's six largest developing
economies. Leaving aside the oil-rich state of Saudi Arabia and also the
two large and emerging OECD economies of Mexico and Turkey, the
BRIICS countries are by far the largest economies in the developing and
transition world, and the only developing or transition countries with
gross national incomes of over $200bn per annum (World Bank 2007). For
comparison purposes, the smallest of the BRIICS countries, namely South
