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Contractual Implications of International Trade in Tacit Knowledge

  • Pedro Mendi


    (School of Economics and Business Administration, University of Navarra)

This paper searches for evidence on the additional difficulty the parties have in contracting for the transfer of know-how relative to the transfer of patented technology. There is empirical evidence, drawn from a sample of contracts for the acquisition of technology by Spanish firms in 1991, that contracts scheduled to last shorter are less likely to include the transfer of know-how. It is also found that technical assistance is bundled together with the transfer of know-how, so as to mitigate opportunistic behavior on the sellers side.

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Paper provided by School of Economics and Business Administration, University of Navarra in its series Faculty Working Papers with number 11/04.

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Length: 25 pages
Date of creation: 01 May 2004
Date of revision:
Publication status: Published, Applied Economics, 2007, vol. 39: pp. 1173-1183
Handle: RePEc:una:unccee:wp1104
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  1. Arora, Ashish, 1996. "Contracting for tacit knowledge: the provision of technical services in technology licensing contracts," Journal of Development Economics, Elsevier, vol. 50(2), pages 233-256, August.
  2. Choi, Jay Pil, 1996. "Technology Transfer with Moral Hazard," Economics Series 22, Institute for Advanced Studies.
  3. Klein, Benjamin, 1996. "Why Hold-Ups Occur: The Self-Enforcing Range of Contractual Relationships," Economic Inquiry, Western Economic Association International, vol. 34(3), pages 444-63, July.
  4. Anton, James J & Yao, Dennis A, 1994. "Expropriation and Inventions: Appropriable Rents in the Absence of Property Rights," American Economic Review, American Economic Association, vol. 84(1), pages 190-209, March.
  5. King, John T., 2003. "The sale of unprotected inventions under alternative models of contracting behavior," International Journal of Industrial Organization, Elsevier, vol. 21(1), pages 57-77, January.
  6. Pedro Mendi, 2005. "The Structure of Payments in Technology Transfer Contracts: Evidence from Spain," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(2), pages 403-429, 06.
  7. Caves, Richard E & Crookell, Harold & Killing, J Peter, 1983. "The Imperfect Market for Technology Licenses," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 45(3), pages 249-67, August.
  8. Anton, James J & Yao, Dennis A, 2002. "The Sale of Ideas: Strategic Disclosure, Property Rights, and Contracting," Review of Economic Studies, Wiley Blackwell, vol. 69(3), pages 513-31, July.
  9. Kamien, Morton I., 1992. "Patent licensing," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 11, pages 331-354 Elsevier.
  10. Arrow, Kenneth J, 1969. "Classificatory Notes on the Production and Transmission of Technological Knowledge," American Economic Review, American Economic Association, vol. 59(2), pages 29-35, May.
  11. Macho, I. & Martinez-Giralt, X. & Perez-Castrillo, D., 1993. "The Role of Information in Licensing Contract Design," UFAE and IAE Working Papers 216.93, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  12. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
  13. Anand, Bharat N & Khanna, Tarun, 2000. "The Structure of Licensing Contracts," Journal of Industrial Economics, Wiley Blackwell, vol. 48(1), pages 103-35, March.
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