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¡®Davids¡¯ Are Not Small ¡®Goliaths¡¯: R&D And Technology Licensing In Brazilian Production

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  • DANIEL K.N. JOHNSON

    (Colorado College)

Abstract

Small firms are qualitatively different than large firms with respect to technology acquisition. As such, liberalization of technology flows in newly industrialized nations may have two potential effects, possibly felt differentially by small firms and large firms. First, technology flows may replace domestic research with cheaper imported foreign research. Second, they may combine with domestic research to improve local economic growth. This paper uses a unique firm-level dataset, modelling the choice between R&D expenditures and technology licensing behaviour in Brazil, explicitly considering corner solutions. Extending the results found elsewhere in the literature, econometric estimation of simultaneous input demand for capital, labor and both types of technology acquisition reveals that while very small firms see technology licensing and R&D as contemporaneous substitutes, firms of moderate to large size treat them as complements. Each firm¡¯s licensing experience also plays a key role in the decision.

Suggested Citation

  • Daniel K.N. Johnson, 2016. "¡®Davids¡¯ Are Not Small ¡®Goliaths¡¯: R&D And Technology Licensing In Brazilian Production," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 41(3), pages 31-53, September.
    • Handle: RePEc:jed:journl:v:41:y:2016:i:3:p:31-53
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Brazil; Patent; Licensing; Technology Acquisition; Kuhn-Tucker;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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