This report focuses on technology transferred through contractual arrangements by firms in industrialized countries to enterprises in developing countries, either within TNCs or through joint ventures and/or licensing agreements with independent recipients. The main issues discussed in the literature on technology transfer in the 1980s decade are reviewed, shedding some light on the factors accounting for the declining interest on the topic. The main features of the macroeconomic environment are pointed out to examine then the evidence available on technology flows to developing countries. The relevant policy modifications regarding direct foreign investment, technology transfer and trade are examined and references are made to the growing heterogeneity of enterprises operating in developing countries. In particular, how domestic and foreign enterprises operating in Latin American countries have adjusted to the opening up these economies and what have the implications of this adjustment been for technology transfer and for technological innovation.