Governance of technology transfer for multinational corporation in the host economy case study of samsung mobile communication FDI in China

Abstract

This research attempts to identify the governance of technology transfer between countries, aiming at building strategies of foreign investors for effective business activities in the host economy. The research analyses the main forms and processes of technology spillover from foreign investors to local recipients. More specifically, it examines the technology transfer of Korean technology leading company, Samsung CDMA (code division of multiple access) mobile communication, in Shenzen and Shanghai, China. Korean traditional foreign direct investment (FDI) in China has been export-oriented to sustain existing foreign markets. However, changes in Chinese economic environments have led to the transformation of Korean FDI characteristics towards creating the local market in China. In particular, Samsung CDMA FDI has gone through a significant strategic transition in that it has attempted to transfer its technology, contrary to GSM (global system for mobile) FDI dominated by European and American leading companies. The governance of technology transfer enabling Samsung to transit the FDI strategy could be originated in 1) changes in the local market structure, 2) the Chinese government policies for stimulating technology transfer, and 3) the accumulation of Korean CDMA technology capability. Furthermore, it attempts to identify the way and degree of technology transfer of Samsung CDMA mobile communication through investigating production networks in China. The empirical evidence, the case of Samsung CDMA mobile communication technology transfer in China, is used to assess and contribute to the study of the role of technology transfer for effective business activities of FDI enterprises in the host economy.