Technological Transfer Channels of Food and Beverage Processing Multinationals to Host Countries: An Empirical Analysis

Abstract

This research examines the possibility of food and beverage (F&B)-processing multinational corporations serving as a viable conduit for the international diffusion of technology. It utilizes existing literature to analyse three potential avenues through which technology transfer occurs from these corporations to host sectors: contract farming, domestic collaboration for innovation, and spillover effects of Foreign Direct Investment (FDI). In specific instances, these firms might provide support to local innovators through financial assistance or complementary resources. Additionally, they may actively facilitate technology transfers to particular types of local partners and they may generate demonstration effects. Nevertheless, the prevailing evidence consistently indicates that the impact of FDI on the host sector is generally limited or selective. The findings of this study cast doubt on the overly optimistic views held by international organizations and host governments regarding FDI in the food sector as a major source of cutting-edge technology for host countries. The incentives offered to food and beverage multinationals should be carefully calibrated to strike a balance between acknowledging potential benefits to the sector's innovation system and maintaining a realistic perspective on the actual outcomes. This study combines and analyses three separate empirical lines of research in parallel to offer factual elements for a policy debate. By integrating these different research approaches, the study aims to contribute to a well-informed discussion on relevant policy matters.