International technology transfers and international technology payments: Definitions, measurement and firms' behaviour

Abstract This paper deals with some methodological issues related to the recording and measurement of international transfers of technology by technological balances of payments. Because technology can circulate internationally under many guises, in the form of goods, services or scientific and technical information it is necessary to define the international transfer of technology, as part of the overall circulation of technology. Furthermore it appears that technological balances of payments include other components beside the technology payments linked to international transfers strictly speaking. But conversely there exist technology transfers which are not recorded at all. Section 2 of the article is devoted to definition and interpretation issues so as to ascertain to what extent technological balances of payments correspond to international transfers of technology. Section 3 examines how technology transfers, once recorded, are measured. Measurement problems cover three issues: the transfer price, the economic value of technology transferred and the national significance of the flows recorded. These issues are examined with reference to the technology market and the firm's behaviour at the international level. Special features of technology as an intangible asset explain the ways in which it is traded and particularly the extent of intra-firm transfers taking place inside the multinational enterprises: this may eventually be related to the “transactional approach” to the multinational enterprises. Recent trends in international technology payments as well as international direct investments are then examined. In conclusion, the article provides some recommendations concerning the possible improvement and interpretation of technological balance of payments as a partial indicator of the international diffusion of technology.