Levels of economic development, political stability,
technology transfer requirements, local competition,
learning capability, and a host of other characteristics
are likely to vary across host countries. We hypothesized
in the introduction that it should be possible to
observe systematic crosscountry differences in the
MNC affiliates’ technology imports if these host
country characteristics influence the marginal costs
and benefits of technology transfer, as argued by
Wang and Blomstrom (1992). Since most of these
features are difficult to measure empirically, we have
restricted our analysis to proxies for three variables -
technology transfer and performance requirements,
local competition, and local learning capability -but
even these suffer from some obvious weaknesses.