Technology Transfer, Merger and Joint Venture: A Comparative Welfare Analysis
AbstractWe consider a framework where initially a foreign firm and a few domestic firms are competing in a homogenous product local market. The foreign firm has a lower marginal cost of production relative to the domestic firms. We study then possibility of a bilateral agreement between the foreign firm and a local firm on each of technology transfer, merger and joint venture. Given the optimal behavior of the foreign firm, the paper also examines welfare implica - tions of each such collaborative deal. Depending on cost asymmetry it is always profitable for the foreign firm to go for the one or the other deal. But the local government generally encourages new firm joint venture formation. The degree of cost asymmetry and the number of firms in the market play an impor - tant role in this analysis.
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Bibliographic InfoArticle provided by Center for Economic Integration, Sejong University in its journal Journal of Economic Integration.
Volume (Year): 14 (1999)
Issue (Month): ()
technology transfer; merger; joint venture;
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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