The Tico Tiger That Hasn’t …

Abstract

TNCs’ most valuable potential contribution to the development of a small latecomer lies in the advancement of the country’s knowledge-based assets. Through linkages and spillovers, high-tech FDI can expand the technological, production, and marketing capabilities of national producers thus allowing them to become more competitive over time, expand and export their own production, and move up the value chain in their respective areas of production. Whether such positive developments actually occur or not depends critically on whether there is a match between TNCs’ desire for linkage formation on the one hand and indigenous capabilities to meet such desire on the other.