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Exclusive Safeguards and Technology Transfer: Subcontracting Agreements in Eastern Europe's Car Component Industry

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  • H. Peter Møllgaard

    (Copenhagen Business School)

  • Jochen Lorentzen

    (Copenhagen Business School)

Abstract

We study the rationale for the use of exclusivity to protect transfer of technology in subcontracting agreements. The legal possibility arises through the EU Notice on Subcontracting. Empirically, the link between exclusive agreements and technology transfer among firms in the automotive supply industry in EU candidate countries is surprisingly weak, although with exclusive-supply or exclusive-buying clauses in subcontracting agreements upstream transfer of technology is more likely. Exclusive agreements are often reciprocal, and are typically passed on. Downstream firms are more likely to face and use vertical restraints. Technology trickles upstream: Multinational final assemblers transfer more technology than lower-tier suppliers.

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Bibliographic Info

Paper provided by University of Copenhagen. Department of Economics. Centre for Industrial Economics in its series CIE Discussion Papers with number 2002-12.

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Length: 15 pages
Date of creation: Dec 2002
Date of revision:
Handle: RePEc:kud:kuieci:2002-12

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Keywords: vertical restraints: technology transfer; automotive supply networks; competition policy;

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  1. B. Douglas Bernheim & Michael D. Whinston, . "Exclusive Dealing," Working Papers 96008, Stanford University, Department of Economics.
  2. Nancy Gallini & Suzanne Scotchmer, 2003. "Intellectual Property: When is it the Best Incentive System?," Levine's Working Paper Archive 618897000000000532, David K. Levine.
  3. Grossman, Sanford J. & Hart, Oliver D., 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Scholarly Articles 3450060, Harvard University Department of Economics.
  4. Patrick Rey & Joseph Stiglitz, 1994. "The Role of Exclusive Territories in Producers' Competition," NBER Working Papers 4618, National Bureau of Economic Research, Inc.
  5. Kaminski, Bartlomiej & Ng, Francis, 2001. "Trade and production fragmentation : Central European economies in European Union networks of production and marketing," Policy Research Working Paper Series 2611, The World Bank.
  6. repec:fth:eeccco:119 is not listed on IDEAS
  7. Dutz, Mark A. & Vagliasindi, Maria, 2000. "Competition policy implementation in transition economies: An empirical assessment," European Economic Review, Elsevier, vol. 44(4-6), pages 762-772, May.
  8. Gonzalez-Diaz, Manuel & Arrunada, Benito & Fernandez, Alberto, 2000. "Causes of subcontracting: evidence from panel data on construction firms," Journal of Economic Behavior & Organization, Elsevier, vol. 42(2), pages 167-187, June.
  9. Butz, David A & Kleit, Andrew N, 2001. "Are Vertical Restraints Pro- or Anticompetitive? Lessons from Interstate Circuit," Journal of Law and Economics, University of Chicago Press, vol. 44(1), pages 131-59, April.
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