Faculty of Business Administration and Management

Permanent URI for this communityhttp://hdl.handle.net/20.500.12280/157

Browse

Browsing Faculty of Business Administration and Management by Subject "Absorptive capacity"

Filter results by typing the first few letters
Now showing 1 - 1 of 1
  • No Thumbnail Available
    Item
    Foreign Direct Investment and Development of Local Firms: Highlighting the Need to Build Absorptive Capacity
    (Uganda Martyrs University, 2012) Lugemwa, Peter
    Many developing countries are investing a lot to attract FDI. As a consequence of the linkages between FDI and the local firms and the resultant technological spillovers, local firms are expected to experience growth. However, there is evidence to suggest that FDI does not necessarily lead to the growth of local firms. Rather, local firms may be competed out of business. It is therefore imperative that local firms build absorptive capacity to benefit from FDI. A minimum threshold of absorptive capacity is necessary for FDI to contribute to the growth of local firms. In this context absorptive capacity is the technological gap between the domestic and foreign firm. Evidence suggests that the wide technological gap between local and foreign firms is impediment to the technological transfer between them.