as economic criteria in these decisions" (Betz, 1984, p. 3). When dealing with LDCs then, where relatively labor-abundant conditions characterized by low wages prevail, the appropriate technology is one which reflects these conditions; i.e. a labor-intensive technology. This is the current guideline set by theorists of appropriate technology, and to a great extent it is valid considering the extent of unemployment in these countries.
The question then is whether MNCs attempt to adapt to these conditions by 1) importing a different technology, a more labor-intensive technology,, than they use in developed countries (ex-ante substitution), or 2) modifying their technology after it has been installed so as to employ more labor. it should be noted that alternative technologies with different labor intensities do indeed exist, as has been noted by, among others, Pack (1987). There are two clashing views of behavior here. One is that multinationals, being profit-maximizing entities, will absorb the information-search costs and are hence more likely to implement a cost-minimizing, labor-intensive technology than their local counterparts, who do not have the same resources as a global organization. The other view states the opposite. By standardizing operations and reducing such costs as different training, administration, and R & D processes, the multinationals are acting in a profit-maximizing manner--in a way that distorts local factor prices. Empirical evidence does seem to resolve this question somewhat.
Courtney and Leipziger (1975) point out that the ex-ante technology (i.e. the plant design) is brought in, in most cases, unaltered from the developed country. While this does seem to point toward a negative conclusion concerning the transfer of appropriate technology, they do note that, when the plant is actually run, modifications occur. This reveals--and other reports such as Baranson (1978) concur--that, while MNCs are...