Collaboration in Technology and Multinational Production

How does technology sharing affect global production choices? To answer this question, I incorporate technology choices into a structural multinational production model and allow for collaboration in specialized assembly assets across firms when choosing the optimal production locations for their varieties. I find that both the technology choice itself and the potential sharing of it have important effects on the expected cost and profits of firms. Conditional on technology choices, the median firm's cost of serving a market increases by 24.65% compared to traditional models that do not model input technology. On the other hand, allowing for collaboration reduces their cost by 2.9%, with large firm heterogeneity. Importantly, the model allows for analysis not only of trade policy shocks but also of industrial policies. While restricting technology access has limited global effects, it creates significant production consequences for specific firms and countries, highlighting industrial policy as a more targeted tool than trade policy.