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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.

Suggested Citation

  • H. Peter Møllgaard & Jochen Lorentzen, 2002. "Exclusive Safeguards and Technology Transfer: Subcontracting Agreements in Eastern Europe's Car Component Industry," CIE Discussion Papers 2002-12, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
    • Handle: RePEc:kud:kuieci:2002-12
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    File URL: http://www.econ.ku.dk/cie/dp/dp_2000-2002/2002-12.pdf/
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    References listed on IDEAS

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    7. 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.
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    Cited by:

    1. Hiroshi Kitamura & Noriaki Matsushima & Misato Sato, 2021. "Lease or sale: When a durable goods monopolist can choose supply chain's openness," ISER Discussion Paper 1127, Institute of Social and Economic Research, Osaka University.

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    More about this item

    Keywords

    vertical restraints: technology transfer; automotive supply networks; competition policy;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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