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Technology policies, technology transfer by multinational enterprises and R&D activities in LDCs

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  • Michael Fung
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    Abstract

    A simple game theoretic model is developed to study the interaction between the multinational enterprise's (MNE's) technology transfer and the domestic firm's R&D intensity in an LDC. The implications of two technology policies are studied. Two results are derived under certain plausible conditions. First, the subsidy on the MNE's technology transfer may decrease the domestic firm's R&D. Second, the subsidy on the domestic firm's R&D may decrease the technology level transferred by the MNE to the host country. Welfare implications on domestic consumers and producers are also derived. Copyright Kluwer Academic Publishers 1994

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    File URL: http://hdl.handle.net/10.1007/BF01000913
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    Bibliographic Info

    Article provided by Springer in its journal Open Economies Review.

    Volume (Year): 5 (1994)
    Issue (Month): 3 (July)
    Pages: 275-287

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    Handle: RePEc:kap:openec:v:5:y:1994:i:3:p:275-287

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    Web page: http://www.springerlink.com/link.asp?id=100323

    Related research

    Keywords: multinational enterprises; technology transfer; technology policies; R&D; developing countries;

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    1. Reinganum, Jennifer F, 1983. "Uncertain Innovation and the Persistence of Monopoly," American Economic Review, American Economic Association, vol. 73(4), pages 741-48, September.
    2. Huizinga, H.P., 1989. "National tax policies towards product-innovating multinational enterprises," Discussion Paper 1989-34, Tilburg University, Center for Economic Research.
    3. Huizinga, Harry, 1992. "The tax treatment of R&D expenditures of multinational enterprises," Journal of Public Economics, Elsevier, vol. 47(3), pages 343-359, April.
    4. Horstmann, Ignatius J & Markusen, James R, 1989. "Firm-Specific Assets and the Gains from Direct Foreign Investment," Economica, London School of Economics and Political Science, vol. 56(221), pages 41-48, February.
    5. Fung, K-Y.M. & Ishikawa, J., 1990. "Dynamic Increasing Returns, Technology And Economic Growth In A Small Open Economy," UWO Department of Economics Working Papers 9013, University of Western Ontario, Department of Economics.
    6. Glenn C. Loury, 1976. "Market Structure and Innovation," Discussion Papers 256, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    7. Grossman, Gene M & Helpman, Elhanan, 1990. "Comparative Advantage and Long-run Growth," American Economic Review, American Economic Association, vol. 80(4), pages 796-815, September.
    8. Gorecki, Paul K, 1976. "The Determinants of Entry by Domestic and Foreign Enterprises in Canadian Manufacturing Industries: Some Comments and Empirical Results," The Review of Economics and Statistics, MIT Press, vol. 58(4), pages 485-88, November.
    9. Blomstrom, Magnus & Persson, Hakan, 1983. "Foreign investment and spillover efficiency in an underdeveloped economy: Evidence from the Mexican manufacturing industry," World Development, Elsevier, vol. 11(6), pages 493-501, June.
    10. Veugelers, Reinhilde & Houte, Peter Vanden, 1990. "Domestic R&D in the presence of multinational enterprises," International Journal of Industrial Organization, Elsevier, vol. 8(1), pages 1-15.
    11. Horstmann, Ignatius J & Markusen, James R, 1987. "Strategic Investments and the Development of Multinationals," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 28(1), pages 109-21, February.
    12. Jensen, Richard & Thursby, Marie, 1987. "A Decision Theoretic Model of Innovation, Technology Transfer, and Trade," Review of Economic Studies, Wiley Blackwell, vol. 54(4), pages 631-47, October.
    13. Lee, Tom & Wilde, Louis L, 1980. "Market Structure and Innovation: A Reformulation," The Quarterly Journal of Economics, MIT Press, vol. 94(2), pages 429-36, March.
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