Technology transfer and multinationals: The case of Balearic hotel chains' investments in two developing economies

This paper provides a comparison between the number and the type of technologies transferred among firms located in the original destination (Balearics) and two Latin American destinations (LAC) to document differences in innovative and absorptive patterns at hotel establishment level. Empirical evidence is obtained from surveys from hotel managers located in Mexico and Dominican Republic. Results indicate that LAC affiliates are more innovative than hotels located in the Balearics and this difference is significant in hotels operating since 1990. Furthermore, a positive relationship between hotel innovation rate and hotel size is found, and when the number of innovations per hotel by rooms is normalized, hotels with more experience tend to be more innovative. LAC establishments introduce more process and organizational innovations than Balearic hotels while this pattern does not seem to be stable across different hotel sizes. Finally, hotels in LAC countries collaborate with local firms in the introduction of innovations and for such reason all the establishments update workers' qualification with training activities. These two channels suggest the possibility that the local economy may be benefited from multinational firms via knowledge spillovers. (c) 2006 Elsevier Ltd. All rights reserved.