The Role of Intellectual Property Rights for Technology in FDI into CEE

Abstract

Having treated spillovers as a positive condition for the technology-accelerating role of inward manufacturing FDI, and having analysed conditions at the firm level, this chapter now approaches the issue of conditions of technology transfer from a different, complementary perspective: now, the ownership advantage aspect à la Dunning of technology and knowledge owned by the foreign investor moves into the limelight. Knowledge and technology constitute firm-specific (ownership) advantages that are increasingly important as a competitive factor between firms in the industrialised world. Knowledge, however, has the particular characteristic that it may be applied by several users at the same time without diminishing its content, possibly even the converse (think, for example, of the accumulative character of an idea). Whilst there is no technical exclusivity for the use of knowledge, the commercial value of knowledge can very well be held to be exclusive: a firm has a competitive advantage over rival firms if it uses a particular piece of knowledge or technology that it exclusively owns and competitors therefore do not have, or cannot, are not allowed to apply¹