The level of achievement and condition of technology transfer process is substantially affected by the extent of host government intervention, through policies and regulations, and responses to them by the technology transferors through their corporate strategies. Notwithstanding the equally critical role of the later, this paper focuses on the current Malaysian Foreign Investment and Technology Policies on the process of technology transfer by foreign corporations in Malaysia as the ground evidence for policy argumentation to assess the policy performance. It will be argued that in their attempt to foster and enhance effectiveness and efficiency of technology transfer process, the policy measures and implementation procedures are entangled in the complexity of serving both national development goals and corporate goals. Specifically, these policies face the dilemma of reconciling the national goals of industrial development and increasing the indigenous technological capability with the needs to maintain the free-flow of foreign investment for technological learning sources and to counter the corporate strategies for technology transfer to local firms. Accordingly, the level and characteristics of the technology transferred to local firms are adversely affected.

While adopting the general framework of integrated policy analysis, this paper will address the subject matters by adopting the decision-theoretic evaluation approach. The theoretical implication of this paper lies in its appraisal of the role of host government intervention in shaping the technology market structure and the theory of internationalization of firms.