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According to the Appropriability Theory, the most serious threat facing innovative MNCs is the loss of their new technology to rivals and copiers. For this reason, MNCs prefer to transfer high technology worldwide from inside the firm rather than through the market mechanism. Because it is easier to copy or steal a less sophisticated technology than a more complex development, MNCs tend to prepare abroad those products and processes that are not very useful to the advancement of poor countries. In addition, they tend to price high-technology products at a level sufficiently low to discourage new competitors from entering the market.
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