The essence of modern economic growth is the increase in the stock of useful knowledge and the extension of its application. Since the origins of technical and social innovations have never been confined to the borders of any one nation, the economic growth of all countries depends to some degree on the successful application of a transnational stock of knowledge. Nevertheless, economists have been remarkably slow in addressing themselves to the economics of international technology transfer. This paper addresses itself to this need. The starting-point is Arrow's suggestion (Am. Econ. Review, 52: 29-35 (May 1969)) that the cost of communication, or information transfer, is a fundamental factor influencing the world-wide diffusion of technology. The purpose of the paper is to examine the level and determinants of the costs involved in transferring technology. The value of the resources that have to be utilized to accomplish the successful transfer of a given manufacturing technology is used as a measure of the cost of transfer. The resource cost concept is therefore designed to reflect the ease or difficulty of transferring technological know-how from manufacturing plants in one country to manufacturing plants in another. 32 references.