Start
August 23, 2024 - 3:30 pm
End
August 23, 2024 - 5:00 pm
Title – Multinational Corporations and Technological Change in Host Countries: An Indian Perspective
by
Prof. Rakesh Basant
Professor of Economics (Retd.), Indian Institute of Management Ahmedabad (IIMA)
Abstract
Significant work has been done on the impact of foreign direct investment (FDI) on innovation and productivity of host country firms. Activities undertaken by multinational corporations affect the nature of competition in the host country markets as well as create a potential for technology spillovers for host country firms. These competition and contagion effects determine the impact of MNC presence on technological change in the host nation. Studies have shown that both the competition and contagion effects of MNC presence are affected by a variety of factors. These include the nature of FDI (greenfield, brownfield, mergers & acquisitions), nature of MNC ownership (wholly owned subsidiary, joint venture, equity alliance), type of of MNC activity (R&D facility, contract R&D, manufacturing, marketing and distribution etc.), technology intensity of the sector (high-tech or low-tech), nature of MNC linkages with host country firms (backward, horizontal, forward), absorptive capacity of host country firms, technology gap between MNCs and the host country firms, institutional characteristics of the host country economy and the policy environment. Given the complexity of the ways through which FDI may affect technological change in the host country, policy makers need to worry about the interplay of policy instruments that affect the nature of MNC activity and its linkages with the rest of the economy. Using some recent data on the dimensions noted above, the lecture would explore some of these complexities and highlight certain policy imperatives.
Prof. Rakesh Basant
Retired as a Professor of Economics at the Indian Institute of Management Ahmedabad (IIMA) in 2022. During his long tenure (1994-2022) at IIMA, he held several key positions including JSW Professor of Innovation and Public Policy and Dean, Alumni and External Relations. He has been associated with the Centre for Innovation, Incubation and Entrepreneurship (Now IIMA Ventures – https://iimaventures.com/) at IIMA since its inception and was its chairperson for several years. Teaching and research interests include firm strategy, innovation, intellectual property rights, entrepreneurial business models, public policy & regulation. Recent research has focused on capability building processes in industrial clusters, Foreign Direct Investment in R&D, innovation-internationalization linkages, competition policy, inter-organizational linkages for technology development (especially academia-industry relationships), incubation models in higher education institutions, emerging entrepreneurial patterns and ecosystem in India, strategic and policy aspects of intellectual property rights, linkages between public policy and technological change, economics of strategy, the small scale sector in India and policy issues in higher education. Sectoral focus of his research in the aforementioned areas has been on Pharmaceutical, IT, Electronics and Auto-component industries. He was a member of the Indian Prime Minister’s High-Level Committee (also known as Sachar Committee) that wrote a report on the Social, Economic and Educational Conditions of Muslims in India. In continuation of this work, part of current research focuses on issues relating to caste and religion, especially affirmative action in higher education. Widely published in national and international journals, he has had an extensive international exposure through several collaborative projects, seminars and conferences, teaching at universities abroad and working as a consultant to several international organizations. His recent book – The Black Box – Innovation and Public Policy in India (IIM Ahmedabad Business Books. Penguin Random House India) – brings together insights on critical issues relating public policy and technological change.