Technology transfer and spillovers: Does local participation with multinationals matter?

This paper examines the effects on technology transfer and spillovers deriv ing from ownership sharing of foreign multinational affiliates. More specif ically, we try to answer two questions, using unpublished Indonesian micro data. Firstly, do establishments with minority and majority ownership diffe r in terms of productivity levels? Secondly, does the degree of spillover d iffer with the degree of ownership in the FDI? Our results show that foreig n establishments have comparable high levels of labor productivity and that domestic establishments benefit from spillovers. However, the degree of fo reign ownership does neither affect the level of labor productivity in fore ign establishments, nor the degree of spillovers. (C) 1999 Elsevier Science B.V. All rights reserved. JEL classification: F23; O30.