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Knowledge Diffusion, Supplier's Technological Effort and Technology Transfer via Vertical Relationships

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Author Info
GOH, Ai-Ting ()
Abstract

This paper studies the effect of knowledge diffusion on the incentives for developed countries(DC)' firms to undertake costly technology transfer to their developing countries(LDC)' suppliers whose cost of production varies inversely with their technological effort. When the incumbent supplier's cost of improving efficiency is high, upstream (or, respectively, downstream) diffusion of knowledge to potential input (final output) producers encourages (discourages) technology transfer as it increases upstream (downstream) competition. However, and in sharp contrast to existing literature, when technological effort is less costly, upstream (downstream) knowledge diffusion discourages (encourages) technology transfer by reducing (increasing) the incumbent supplier's technological effort.

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Paper provided by HEC Paris in its series Les Cahiers de Recherche with number 793.

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Length: 44 pages
Date of creation: 01 Dec 2004
Date of revision:
Handle: RePEc:ebg:heccah:0793

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Related research
Keywords: technology transfer; technological effort; developing countries; knowledge diffusion; buyer-supplier;

Find related papers by JEL classification:
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
O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes

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  11. Stephen L. Parente & Edward C. Prescott, 2002. "Barriers to Riches," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661306, December.
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