A policy conclusion of these findings is that host
country governments may choose to support local
investment, competition, and education rather than to
rely on controls and direct supervision of FDI to
secure inflows of technology to the affiliates of foreign
MNCs. This conclusion applies in particular for flows
of disembodied technologies that are reflected by the
affiliates’ payments of royalties and license fees. One
problem, of course, is that some of the these policies
- especially those that promote competition - may
be contrary to measures that are commonly used by
host countries to attract new MNCs, e.g., import protection.
In practice, it may therefore be necessary to
weigh the benefits from larger intlows of technology
to already present MNC affiliates against the possible
costs in terms of foregone new investment from
abroad.