Foreign investment and technology transfer : A simple model
AbstractThis paper develops a model in which international technology transfer through foreign direct investment emerges as an endogenized equilibrium phenomenon, resulting from the strategic interaction between subsidiaries of multinational corporations and host country firms. The model explicitly recognizes two types of costs -- the costs to the multinational of transferring technology to its subsidiaries and the learning costs of domestic firms -- and treats technology transfer in a game theoretic context. The model points to the importance of the learning efforts of host-country firms in increasing the rate at which MNCs transfer technology. The paper also explores some of the reasons why learning investment in host country firms may be suboptimal.
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Bibliographic InfoArticle provided by Elsevier in its journal European Economic Review.
Volume (Year): 36 (1992)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/eer
Other versions of this item:
- Magnus Blomstrom & Jian-Ye Wang, 1992. "Foreign Investment and Technology Transfer: A Simple Model," NBER Working Papers 2958, National Bureau of Economic Research, Inc.
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