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The Capital Intensity of Technology and Foreign Direct Investment in the Third World: An Empirical Analysis

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This paper tests the hypothesis that the presence of foreign direct investment (fdi) raises the capital-intensity of technology in the Third World. If this hypothesis is accepted, it may he because multinationals (MNCs) adopt a more capital-intensive technology or because mnc's might tend to invest in the more capital-intensive sectors of manufacturing. Evidence presented in this paper shows that the capital-intensity of technology is a positive function of the level of fdi, but the evidence is inconclusive that MNCs tend to invest more in the relatively capital-intensive sectors of manufacturing.

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  • Cebula, Richard J. & Saltz, Ira S., 1993. "The Capital Intensity of Technology and Foreign Direct Investment in the Third World: An Empirical Analysis," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 46(4), pages 345-359.
    • Handle: RePEc:ris:ecoint:0431
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