The aim of this paper is to investigate further a number of hypotheses that have been advanced in some of the literature on indigenous technological capabilities (ITC) in less-developed countries. The paper draws on a case study of a sample of machine-producing firms in Hong Kong.1 Since the firm sample is relatively small, and since all the firms come from only one sector in one country, it is obviously not possible to reach very firm conclusions about the hypotheses. Further-more, all the hypotheses are inherently difficult to examine since it is not clear in any concrete situation what would have occurred had certain crucial parameters been altered. Nonetheless, it is felt that Hong Kong is of particular interest in any discussion of ITC as a result of near-free-trade and minimal government intervention which are principal features of this country. In this respect Hong Kong is significantly different from all the other newly industrialised countries, including Singapore, with which it is often compared.
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