ABSTRACT
The technological activities of multinational enterprise (MNE) subsidiaries in strategic host countries contribute to the competitive position of host countries that have a large market, high per capita income, and an established scientific and technological base. Technological innovations determine the competitive advantage of nations and strongly influence government technology policy. The extent to which the U.S. government should play a central role in supporting, directing, and developing commercial technologies is a subject of much debate. The U.S. Office of Technology Assessment (OTA) suggests that the government should consider its role on a sector-by-sector basis because the innovation process varies among industries, as do barriers to successful innovation (Hanson, 1995). Changes in the global economy have created a new reality that complicates the analysis of domestic technology policies. For example, MNEs have well-established subsidiaries in the United States that have access to U.S. government-supported corporate R&D activities and output. In fact, overseas firms have become aggressive recipients of U.S. federal R&D (Burton, 1992). By establishing formal and informal linkages to U.S. technology centers and corporations, the local subsidiaries of foreign companies, through reverse technology transfers to their headquarters, are able to innovate and “spin” technological advancements for their home markets (George, 1995; Kotabe, 1990a).
