How firms develop technological capabilities through foreign technology acquisitions : case studies from Sri Lanka

There is a general consensus in the innovation literature that foreign direct investment (FDI) provides an underpinning mechanism for technological development and economic growth for host nations. However, the literature provides inconclusive evidence that FDI will necessarily drive technological development among host firms and lead to longer term sustainable technological benefits. Moreover, how direct technology adoption and associated learning from a developed or emerging economy by firms in less developed economies through FDI benefit host firms is far from clear cut. What we know confidently is that firm growth and development is a complex phenomenon and the strategic use of technology sources in that development process is quite complex. In order to study the learning process in more detail there is a need for more firm-level studies in less developed economies. This will help overcome the limited knowledge base on contextual differences and allow the opportunities for learning about firm growth and development within that context.