Why is it important for a multinational corporation to hold technological leadership? A technological transfer perspective

The paper studies why a corporation hopes to keep technological leadership. The answer is shown by a theoretical model in the perspective of technological transfer. The model consisting of two countries, each of which contains numerous corporations,has pointed out: restrained technological transfer from a corporation or a country with superior technology coexists with reduction of pro…t from FDI of the transferee in the domestic market of the transferer and no effect on profit from its own home market, though it positively but trivially affects the latter’s researchand development; on the opposite, benefit for a corporation or a country with advancedtechnology is substantial due to the fact of enjoying higher employment of its domestic productive factors, higher total profit level in both of its home and foreign markets and grasping the initiative of technological transfer which can be strategically used.