Earlier studies have indicated the importance of technology diffusion in terms of increase in social welfare. This notion deserves more attention in the context of a developing country, where technologies are frequently imported and further adopted by indigenous firms. The diffusion process often turns to be critical in accumulating technological capabilities for developing countries, termed as the "assimilation stage." Then, what are the determinants of diffusion rates? Following the view that technology is tacit knowledge, hence incurs costs to be diffused, this paper investigates factors affecting diffusion rates of foreign technologies. A model is proposed, where technology characteristics, market conditions, and government policies are raised as the major determinants. Implications and further study directions are also discussed.

• Dong Jae Kim