While transnational corporations play an essential role in disseminating and diffusing technological knowledge world-wide, their general unwillingness to licence technology to third parties results in a large percentage of their technology sales consisting of internal trade between parent companies and foreign subsidiaries. In addition, the available evidence strongly suggests that transnational corporation parent companies get more royalty payments for low-technology industries, and that relatively little new technology is transferred from parent companies to their foreign affiliates. The actual host country cost of internal transnational corporation technology transfers is considerably higher than that recorded in payments of royalties for knowledge and trademarks and financial charges for technical assistance. Recorded payments do not include the considerable indirect cost to affiliates (and thus to their host country) which may not be immediately apparent under the elaborate internal accounting procedures practised by most transnational corporations. Also, there may be additional costs due to restrictions upon the use of this imported technology, dictated by the global interests of the transnational corporation parent.
In their strategy of product differentiation, most transnational corporations appear to devote more resources to lesser innovations used in the manufacture of new products than to search for new production processes. Furthermore, transnational corporations concentrate on consumption-oriented, rather than production-oriented, technology in developing countries.