Tecbnology transfer of foreign direct investment in China

Abstract

This article considers the governance of technology transfer between countries, the aim of which is more effective foreign direct investment (FDI) business activities in the host economy. The article analyses the main forms and processes of technology spill-over from foreign investors to local recipients More specifically, it examines the technology transfer of a leading Korean technology company, Samsung CDMA (code division multiple access) mobile communication, in Shenzen and Shanghai, China. Traditionally foreign direct investment in China has been export-oriented, to sustain existing foreign markets However, changes in the Chinese economy have resulted in Korean FDI being directed towards creating a local market in China. The factors which have enabled Samsung to adopt its FDI strategy include changes in the local market structure, Chinese government policies for stimulating technology transfer and the accumulation of Korean CDMA technology capability. In addition, by investigating production networks in China, this article attempts to identify bow and to what extent the technology transfer of Samsung CDMA mobile communication has taken place. The empirical evidence provided by the case of Samsung 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.