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Discuss the main factors that have contributed to policy liberalisation towards FDI in LDCs during the last three decades - Essay Example

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A Transnational Corporation (TNC) is a type of company whose operations are located in more than one country, through asset ownership and direct business activities. A firm does not just transform itself from a domestic producer into a TNC overnight. Ietto-Gilles (2012, pp.10)…
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Discuss the main factors that have contributed to policy liberalisation towards FDI in LDCs during the last three decades
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Download file to see previous pages is paper seeks to analyze the reasons why most TNCs have in recent decades been proactive in the transfer of technology and R&D activities to developing countries. In addition, the paper will examine the role played by TNCs in world development, through the transfer of technology and R&D activities.
In order to fully understand the factors facilitating technological transfer and R&D services to developing countries by TNCs, it is important understand the terms “technology”, “technology transfer” and “R&D”. According to Kiely (1998, pp.58) technology is the methodical knowledge of how to produce goods and services. Technology transfer, therefore, refers to the process of commercially spreading such knowledge. R&D on its part is concerned with the investigation, experimentation, and verification phases of product and service innovation or improvement (ibid). Technology plays a very fundamental role in the development of any country. Accordingly, developing countries consider the acquisition of technology as the surest way to attain development to the level of their developed counterparts. In prior years, most TNCs with the capacity to develop advanced technology were solely located in industrialized countries. Consequently, developing countries were left behind in the development of technology (Roberts, 2008 pp.260). This scenario has however changed in the last twenty years.
For any company, whether domestic-based or transnational, the logistics associated with transport and communication is a major influence on operations. Fundamentally, any TNC wishing to set base in a foreign country must first analyze the transport and communication sector of the host country (Ietto-Gilles, 2012 pp.208). Realizing this, most developing countries, through their governments invested a lot in the transport and communication industry in the last two decades. In turn, many TNCs were able to set base in these countries and run their operations smoothly. According to ...Download file to see next pagesRead More
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