The data on technology transfers used in this study
are from the US Department of Commerce surveys of
U.S. Direct Investment Abroad, and refer to the
manufacturing operations of majority-owned foreign
affiliates (MOFAs) of US multinationals in 33 host
countries in 1982 (U.S. Department of Commerce,
1985).2 We will define several alternative proxies for
the affiliates technology imports, based on data for the
US. MOFA’s total payments for royalties and license
fees and their imports of capital equipment from the
United States. In addition to the possible data problems
mentioned above, two additional sources of
errors should be noted. The data on the affiliates’ royalties
and license payments include payments to nonaffiliated
persons (although intra-MNC transactions
make up 93% of the total payments), and imports from
all US sources are included in the data on capital
equipment. The proxies therefore refer to the affiliates’
technology imports from all sources rather than
to transfers between parents and affiliates.