A Note on Multinational Corporations and Technology Transfer Agreements

Mir Annice Mahmood

Abstract


Multinational corporations are responsible for much of the
technology transfer that occurs between the developed and developing
countries. Conse¬quently, these corporations play an important role in
economic development by supplying technical skills, managerial know-how
and capital. However, this transfer of technology is not a costless
process: these corporations remit money in the form of royalties,
technical fees, and profits from the less developed countries. For
undivided Pakistan, between 1965-1970 payments for royalties and
technical fees averaged $102 million per year [2, p. 126]. If other
costs, for example, profit repatriation and over-pricing of intermediate
inputs, are included the figure would have been much higher. Much of the
technology that has been transferred to Pakistan has been on a
contractual basis through the subsidiaries of multinational corporations
or through joint ventures with domestic Pakistani-owned companies in the
agri¬cultural and industrial sectors of the economy. In an earlier study
by Radhu [3, pp.361-74] the characteristics of fifty contractual
agreements involving technology transfer upto 1969 have been described
and analysed. This note examines the contractual agreements from 1970 to
1976. In all, fifty four contracts are examined.1 These agreements cover
the manufacturing sector of the Pakistani economy.

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DOI: https://doi.org/10.30541/v17i3pp.355-364

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