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Endogenous Process Innovation under Piracy and Multinational Enterprise

Author

Listed:
  • Jason E. Christian

    (Department of Agricultural Economics, U.C. Davis)

Abstract

A $2\times 2\times 2$ model with endogenous process innovation describes two regimes for international technology transfer: multinational enterprise, in which the innovating firm receives all rents from foreign and domestic use of the innovation, and piracy, in which some are all of the rents are kept in the technology-receiving country. Piracy increases the unit requirements for the factor which is scarce in the recipient country, and decreases use of its abundant factor, reducing income in the technology recipient. Any piracy regime can be dominated by a combination of no-piracy and transfers from the innovator to the recipient, with increases in both welfare in the recipient country and innovator profits.

Suggested Citation

  • Jason E. Christian, 1994. "Endogenous Process Innovation under Piracy and Multinational Enterprise," International Trade 9405001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpit:9405001
    Note: LaTeX paper, 22 pages. Uses curves.sty, tables.sty, and harvard.sty.
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    References listed on IDEAS

    as
    1. L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
    2. Jason E. Christian, 1993. "The Simple Microeconomics of Induced Innovation," Industrial Organization 9312001, University Library of Munich, Germany.
    3. Ronald Findlay & Harry Grubert, 1959. "Factor Intensities, Technological Progress, And The Terms Of Trade," Oxford Economic Papers, Oxford University Press, vol. 11(1), pages 111-121.
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    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business

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