Technological Capability and Firm Efficiency in Taiwan (China).

This article highlights the importance of firms' own investments in technological capability. Recent research on the nature and extent of technical change in developing countries shows that the accumulation of technological capability should be treated not as a by-product but as an activity in its own right. This research also points to the critical role of firms and indicates that firm-level efforts to obtain international knowledge may have higher payoffs when accompanied by complementary investments in the development of in-house technological capabilities.