International Technology Transfer measures in an interconnected world: Lessons and policy implications

The aim of this paper is to inform the ongoing debate on the policies being used to encourage international technology transfer (ITT) and, of these, which have the potential to distort trade or investment and which may effectively promote ITT. The paper develops a first-cut approach to cataloguing ITT-related measures across countries. Following the literature, technology transfer-related policies are grouped into six categories: 1) absorptive capacity policies; 2) measures related to intellectual property rights (IPR); 3) FDI promotion measures; 4) FDI restrictions and FDI screening; 5) performance requirements; and 6) investment incentives. A list of regulatory questions about measures in place is devised for the four categories 3 through 6 on which information is currently particularly scarce. Summary results are presented for twenty four developing and developed countries which are important actors in global FDI, technology and product markets. The findings of the literature addressing both the impact of these measures on technology transfer and on market competition are summarised for each of the four policy categories. The paper also explores the extent to which various ITT measures are covered by existing international agreements, with a view to helping inform future approaches. The concluding section elaborates on policy implications.