Mode of foreign entry, technology transfer, and foreign direct investment policy
AbstractForeign direct investment can take place through the direct entry of foreign firms or the acquisition of existing domestic firms. Mattoo, Olarreaga, and Saggi examine the preferences of a foreign firm and the host country government with respect to these two modes of foreign direct investment in the presence of costly technology transfer. The tradeoff between technology transfer and market competition emerges as a key determinant of preferences. The authors identify the circumstances in which the choices of the government and the foreign firm diverge-and in which domestic welfare can be improved by restrictions on foreign direct investment that induce the foreign firm to choose the socially preferred mode of entry.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 2737.
Date of creation: 31 Dec 2001
Date of revision:
ICT Policy and Strategies; General Technology; Knowledge Economy; Environmental Economics&Policies; Agricultural Research; ICT Policy and Strategies; General Technology; Poverty and Trade; Foreign Direct Investment; Trade and Regional Integration;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Salant, Stephen W & Switzer, Sheldon & Reynolds, Robert J, 1983. "Losses from Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, MIT Press, vol. 98(2), pages 185-99, May.
- Campbell, H. F. & Hand, A. J., 1998. "Joint ventures and technology transfer: the Solomon Islands pole-and-line fishery," Journal of Development Economics, Elsevier, vol. 57(2), pages 421-442.
- James A. Brander & Barbara J. Spencer, 1983.
"Strategic Commitment with R&D: The Symmetric Case,"
Bell Journal of Economics,
The RAND Corporation, vol. 14(1), pages 225-235, Spring.
- Morton I. Kamien & Israel Zang, 1987.
"The Limits of Monopolization Through Acquisition,"
754, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Markusen, James R., 2001.
"Contracts, intellectual property rights, and multinational investment in developing countries,"
Journal of International Economics,
Elsevier, vol. 53(1), pages 189-204, February.
- James R. Markusen, 1998. "Contracts, Intellectual Property Rights, and Multinational Investment in Developing Countries," NBER Working Papers 6448, National Bureau of Economic Research, Inc.
- Kabiraj, Tarun & Roy, Prithvijit, 1999. "Technology Transfer, Merger and Joint Venture: A Comparative Welfare Analysis," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 14, pages 442-466.
- Svejnar, Jan & Smith, Stephen C, 1984. "The Economics of Joint Ventures in Less Developed Countries," The Quarterly Journal of Economics, MIT Press, vol. 99(1), pages 149-67, February.
- Wilfred J. Ethier & James R. Markusen, 1991.
"Multinational Firms, Technology Diffusion and Trade,"
NBER Working Papers
3825, National Bureau of Economic Research, Inc.
- Ethier, Wilfred J. & Markusen, James R., 1996. "Multinational firms, technology diffusion and trade," Journal of International Economics, Elsevier, vol. 41(1-2), pages 1-28, August.
- Ethier, W.J. & Markusen, J.R., 1993. "Multinational Firms, Technology Diffusion and Trade," ISER Discussion Paper 0303, Institute of Social and Economic Research, Osaka University.
- Saggi, Kamal, 1999. "Foreign Direct Investment, Licensing, and Incentives for Innovation," Review of International Economics, Wiley Blackwell, vol. 7(4), pages 699-714, November.
- Marjit, Sugata & Broll, Udo & Mallick, Indrajit, 1995. "A theory of overseas joint ventures," Economics Letters, Elsevier, vol. 47(3-4), pages 367-370, March.
- Al-Saadon, Yousef & Das, Satya P., 1996. "Host-country policy, transfer pricing and ownership distribution in international joint ventures: A theoretical analysis," International Journal of Industrial Organization, Elsevier, vol. 14(3), pages 345-364, May.
- Saggi, Kamal, 1996. "Entry into a Foreign Market: Foreign Direct Investment versus Licensing," Review of International Economics, Wiley Blackwell, vol. 4(1), pages 99-104, February.
- Valeria Gattai, 2005.
"Dissipation of Knowledge and the Boundaries of the Multinational Enterprise,"
2005.121, Fondazione Eni Enrico Mattei.
- Valeria Gattai & Corrado Molteni, 2007. "Dissipation of Knowledge and the Boundaries of the Multinational Enterprise," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 143(1), pages 1-26, April.
- Valeria Gattai, 2009.
"Firm’s intangible assets and multinational activity: full versus shared ownership,"
154, University of Milano-Bicocca, Department of Economics, revised Feb 2009.
- Valeria Gattai, 2010. "Firm's intangible assets and multinational activity: Full versus shared ownership," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 19(4), pages 553-589.
- Ayse Kaya & James T. Walker, 2009. "Individual Attitudes towards the Impact of Multinational Enterprises on Local Businesses," Economics & Management Discussion Papers em-dp2009-02, Henley Business School, Reading University.
- Lorenzo Casaburi & Valeria Gattai, 2009. "Why FDI? An Empirical Assessment Based on Contractual Incompleteness and Dissipation of Intangible Assets," Working Papers 164, University of Milano-Bicocca, Department of Economics, revised Jul 2009.
- Onur Koska, 2009. "Foreign Direct Investment For Sale," Working Papers 0910, University of Otago, Department of Economics, revised Oct 2009.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.