| Abstract: | Based on unique firm-level data from 323 majority-owned foreignaffiliates (MOFAs) located in West Sweden in the beginning of2000, we show that foreign-located affiliates of transnationalcorporations (TNCs) generate technological competencies, bothinternally as well as through organised cooperation with externalbusiness partners in the host country. This seems true not onlyfor manufacturing affiliates, but also for wholesale affiliatessupplying industrial products, as well as professional serviceaffiliates providing technical services. In addition, all threecategories of affiliates are engaged in ‘dynamic technologicalintegration’, i.e. a geographical transfer to parent andsister firms of technological competence that MOFAs have developedin cooperation with external business partners in Sweden. Thisindicates that not only the technological competence of MOFAsthemselves, but even the geographical context in which theyare embedded is a relational asset that is crucial for the overalltechnological competitiveness of TNCs. Above all, technological linkages were established with hostcountry customers. Important technological linkages were establishedboth with local business partners in West Sweden, as well asbusiness partners in the Rest of Sweden. Using a logistic regression analysis, we found that technologicalintegration is especially associated with affiliates operatingin competitive host country clusters, indicating that a largepool of indigenous technological competence acts as an importantpull-factor for inward asset-seeking FDI. However, technologicallinkages between foreign TNCs and host country partners doesnot come automatically, instead they need substantial and long-terminvestments in personal and non-personal resources. |
