IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/138366.html

Divide and conquer: industry market structure, inter-firm rivalry, and bargaining over technology

Author

Listed:
  • Minnich, John

Abstract

When do firms trade technology for market access? Theories of foreign investment typically frame host state bargaining power in terms of domestic characteristics like market size. This article examines how the structure of global markets in which firms are embedded and the inter-firm competition this generates shape firm-state bargaining over technology in ways not reducible to host state attributes. I argue that as the number of firms in an industry rises and global market shares become less evenly divided among them, weak market players face strong incentives to transfer technology in return for access to new markets. In this context, host states can “divide and conquer” investors to secure better terms of trade and investment. Case studies of technology transfer in commercial aircraft manufacturing and semiconductor design and fabrication in China show how industry market structure shapes firm-state bargaining over entry terms both across and within industries.

Suggested Citation

  • Minnich, John, 2026. "Divide and conquer: industry market structure, inter-firm rivalry, and bargaining over technology," LSE Research Online Documents on Economics 138366, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:138366
    as

    Download full text from publisher

    File URL: https://researchonline.lse.ac.uk/id/eprint/138366/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michela Giorcelli & Bo Li, 2021. "Technology Transfer and Early Industrial Development: Evidence From the Sino-Soviet Alliance," NBER Working Papers 29455, National Bureau of Economic Research, Inc.
    2. Benjamin Gomes-Casseres, 1990. "Firm Ownership Preferences and Host Government Restrictions: An Integrated Approach," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 21(1), pages 1-22, March.
    3. Jensen, Nathan M., 2003. "Democratic Governance and Multinational Corporations: Political Regimes and Inflows of Foreign Direct Investment," International Organization, Cambridge University Press, vol. 57(3), pages 587-616, July.
    4. Alice H. Amsden & Wan-wen Chu, 2003. "Beyond Late Development: Taiwan's Upgrading Policies," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011980, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bucheli, Marcelo, 2007. "The Politics of Vertical Integration in Extractive Industries: Business History and Political Economy," Working Papers 07-0112, University of Illinois at Urbana-Champaign, College of Business.
    2. Taylor, Mark Zachary, 2007. "National innovation rates: the evidence for/against domestic institutions," MPRA Paper 10997, University Library of Munich, Germany.
    3. Haggard Stephan & Zheng Yu, 2013. "Institutional innovation and investment in Taiwan: the micro-foundations of the developmental state," Business and Politics, De Gruyter, vol. 15(4), pages 435-466, December.
    4. Bothner, Jonathan, 2024. "Institutions as a determinant of FDI and the role of natural resources," Resources Policy, Elsevier, vol. 99(C).
    5. Iamsiraroj, Sasi, 2016. "The foreign direct investment–economic growth nexus," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 116-133.
    6. Rajah Rasiah & Xinxin Kong & Yeo Lin, 2010. "Innovation and learning in the integrated circuits industry in Taiwan and China," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 15(3), pages 225-246.
    7. Jyh-Wen Shiu & Chan-Yuan Wong & Mei-Chih Hu, 2014. "The dynamic effect of knowledge capitals in the public research institute: insights from patenting analysis of ITRI (Taiwan) and ETRI (Korea)," Scientometrics, Springer;Akadémiai Kiadó, vol. 98(3), pages 2051-2068, March.
    8. Ilhan-Nas, Tulay & Okan, Tarhan & Tatoglu, Ekrem & Demirbag, Mehmet & Wood, Geoffrey & Glaister, Keith W., 2018. "Board composition, family ownership, institutional distance and the foreign equity ownership strategies of Turkish MNEs," Journal of World Business, Elsevier, vol. 53(6), pages 862-879.
    9. Po-Chin Wu & Chung-Chih Lee, 2018. "The non-linear impact of monetary policy on international reserves: macroeconomic variables nexus," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(1), pages 165-185, February.
    10. Arora, Ashish & Fosfuri, Andrea, 1999. "Exploring the internalization rationale for international investment: wholly owned subsidiary versus technology licensing in the worldwide chemical industry," DEE - Working Papers. Business Economics. WB 6430, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
    11. Busse, Matthias & Hefeker, Carsten, 2007. "Political risk, institutions and foreign direct investment," European Journal of Political Economy, Elsevier, vol. 23(2), pages 397-415, June.
    12. Akcigit, Ufuk & Alp, Harun & Diegmann, André & Serrano-Velarde, Nicolas, 2026. "Committing to grow: Employment targets and firm dynamics," IWH Discussion Papers 17/2023, Halle Institute for Economic Research (IWH), revised 2026.
    13. Rana, Arslan Tariq & Kebewar, Mazen, 2014. "The Political Economy of FDI flows into Developing Countries: Does the depth of International Trade Agreements Matter?," EconStor Preprints 91501, ZBW - Leibniz Information Centre for Economics.
    14. Kim, Jinhee & Lee, Keun, 2022. "Local–global interface as a key factor in the catching up of regional innovation systems: Fast versus slow catching up among Taipei, Shenzhen, and Penang in Asia," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    15. Mutinelli, Marco & Piscitello, Lucia, 1998. "The entry mode choice of MNEs: an evolutionary approach," Research Policy, Elsevier, vol. 27(5), pages 491-506, September.
    16. Federico Carril-Caccia & Juliette Milgram-Baleix & Jordi Paniagua, 2019. "Foreign Direct Investment in oil-abundant countries: The role of institutions," PLOS ONE, Public Library of Science, vol. 14(4), pages 1-23, April.
    17. Salma Echcharqy, 2020. "Collaborative Growth: The Relationship between the Development Mode and the Profile of Moroccan SME," International Review of Management and Marketing, Econjournals, vol. 10(5), pages 109-116.
    18. Keun Lee & Di Qu & Zhuqing Mao, 2021. "Global Value Chains, Industrial Policy, and Industrial Upgrading: Automotive Sectors in Malaysia, Thailand, and China in Comparison with Korea," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(2), pages 275-303, April.
    19. Paola Perez-Aleman & Flavia Chaves Alves, 2017. "Reinventing industrial policy at the frontier: catalysing learning and innovation in Brazil," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 10(1), pages 151-171.
    20. Tsu Lung Chou & Yu Chun Lin, 2007. "Industrial Park Development across the Taiwan Strait," Urban Studies, Urban Studies Journal Limited, vol. 44(8), pages 1405-1425, July.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • F3 - International Economics - - International Finance
    • G3 - Financial Economics - - Corporate Finance and Governance
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:138366. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.