International Trade - Multinational corporations and technology transfer

Diploma Thesis from the year 2007 in the subject Business economics - Trade and Distribution, grade: 2,3, Technical University of Chemnitz (Finanzwissenschaften), course: Diplomantenseminar, 52 entries in the bibliography, language: English, abstract: The discussion about the role of multinational enterprises (MNE) which are transferring their technology to undeveloped and developed countries is one of the most interesting discussions in the international trade theory with its authors in the century of globalisation. Multinational Enterprises are generating and transferring technology know-how, knowledge and innovations of products and processes over national borders to foreign countries for making research and development (R&D) in especially chosen R&D locations. The focus of the following diploma thesis is to search what kind of role multinational enterprises play in a globalised and internalized world by focussing how they make research and development in foreign countries and especially in developing countries as the third world. In the first main part of the following work it will be described what kind of role multinational enterprise play in the century of globalisation. For a better understanding it follows a description what is exactly meant by the process of internalization of the markets and R&D. It will be discussed through theoretical analysis and models how the process to an internalization of R&D function. These will be explained through different theoretical approaches as the horizontal model of James R. Markusen , the vertical model of Helpman and a model of regression which used independent and dependent variables for the analysis. At least in this chapter the specific features of a MNE will be explained by categorising multinational enterprises through different characteristics and afterward the role of MNE in the process of globalisation will be assumed for the international trade between different countries.The second part will be searching what kind of motives exists for multinational firms to outsource their R&D activities in foreign countries. For this, it is important to say exactly what kind of factors the chose of a location influence. Another interesting point is to analyse what kind of different variation of strategy MNE need and try to follow, especially to define what the goal of MNE is and how they can make benefit through FDI. Furthermore it will be explained the RTA-Index of the company in the domestic market and of the country of destination. In this case it will be assumed what a high or low RTA-Index indicates for companies who want to realise investments in foreign countries.