Foreign Direct Investment, Ownership, and the Transfer of Technology

Using a survey of more than 1000 German investment projects in Central and Eastern Europe, this study analyses the strategies of international joint ventures. Their risks and, in particular, their innovative potential is investigated. As a statistical tool for the analysis of share equations the conditional Tobit model is introduced. The theoretical base is a continuous time, full information model of a joint venture. Surprisingly, sufficient and necessary conditions for joint venture instability and technology transfer can be derived. The survey is used to apply the introduced concepts and to demonstrate the validity of the approach empirically.