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Vertical technology transfer via international outsourcing

In: Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy

Author

Listed:
  • Howard Pack
  • Kamal Saggi

Abstract

To analyze the effect of vertical technology transfer on industrial development in lesser developed countries (LDCs), we develop a model in which the technology transferred to an LDC supplier by a developed country (DC) importer can diffuse to other LDC firms. Surprisingly, even if such diffusion in the LDC market leads to entry into the DC market, it can benefit both the initial DC importer and its initial LDC supplier by reducing the double marginalization problem. This effect does not depend upon whether firms compete in prices or quantities and exists even when the number of entrants into each market is endogenously determined.

Suggested Citation

  • Howard Pack & Kamal Saggi, 2023. "Vertical technology transfer via international outsourcing," World Scientific Book Chapters, in: Kamal Saggi (ed.), Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy, chapter 3, pages 53-79, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789813233027_0003
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    More about this item

    Keywords

    International Technology Transfer; Multinational Firms; Trips; Foreign Direct Investment; Oligopolistic Competition; Vertical Contracts; Intellectual Property Rights;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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