The impact of technological transfer from foreign direct investment (FDI) on host economies : the case of Albania.

Technological transfer through FDI to domestic companies is at the center of current
debates about industrial and economic development. The purpose of this thesis is to
investigate the direct and indirect/spillover technological effects through FDI presence
in the Albanian manufacturing sector. Thus, it examines whether technology,
knowledge and skills are transferred to the domestic companies in Albania, which in
turn enable them to learn, innovate and upgrade. The thesis also examines the
mechanisms and determinants or conditions necessary for the occurrence of direct
effects and spillover process. To serve this aim, we proposed an alternative conceptual
framework and an integrated approach using firm level surveys and case studies, in
order to find out whether the presence of MNEs stimulates direct and spillover effects.
Based on the data provided by survey study, we computed a technological transfer
index, which offers important insights on the extent to of technology transfer. In the
context of an underdeveloped country like Albania, it is important to investigate the role
of FDI. Anyone can imagine that Albania is a technically underdeveloped country and
needs technology to stimulate industrialization and development. Ironically, the country
has not attracted interest from researchers but constitutes a very interesting case in point
given its specific characteristics. Results obtained showed positive direct technological
effects from parent company to the subsidiary including direct transfer of technology,
knowledge and skills, expertise, training. However, results provided limited evidence on
indirect effects. This was as result of limited contact of foreign companies with local
suppliers, customers and competitors. Nevertheless, in case that these contacts exist
there is evidence of positive spillover effects. Spillover effects are expected to increase
in the future. In general, FDI seemed to play an important role in the upgrading of the
local manufacturing industry and in the industrialization of Albania.