Quantitative measurement of advanced manufacturing technology transfer from foreign-based companies to local companies

AUTHOR

K.D.Gunawardana & Chamnong Jungthirapanich(Thailand)

ABSTRACT

The literature on Foreign Direct Investment (FDI) has recently analyzed the nature of the firm’s entry mode choice in a foreign market, particularly the choice between a joint venture and a wholly owned subsidiary. Foreign-based companies are defined as having one or more overseas manufacturing subsidiaries or joint venture relationship. Foreign-based companies can be divided into following three groups in descending order: multinational, transnational and ventures. Most of these companies are using Advanced Manufacturing Technologies (AMT) in manufacturing operations conducted in host country. Therefore experience, initial investment, and location of the host country and number of employees are variables of AMT for conducting this research. This paper aims at providing further empirical evidences on the influence of some key variables in explaining issues related to transfer of AMT.

Advanced Manufacturing Technologies are integral part of the production process. It is important to understand the factors that are associated with differences in technology use at the plant level. This paper examines the relationship between the use of AMT at the plant level and the characteristics of these plants. The researchers have analyzed information collected from 1026 foreign-based companies operating business in Sri Lanka and developed two models-Regression based model and Artificial Neural network based model. It was found that the ANN model and regression model guide same prediction of AMT use by foreign-based companies contributing to developing countries.

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