IDEAS home Printed from https://ideas.repec.org/a/aea/aejmic/v16y2024i2p103-46.html
   My bibliography  Save this article

Technology Transfer in Global Value Chains

Author

Listed:
  • Thomas Sampson

Abstract

Global value chains create opportunities for North-South technology diffusion. This paper studies technology transfer in value chains when contracts are incomplete and input production technologies are imperfectly excludable. It introduces a new taxonomy of value chains based on whether the headquarters firm benefits from imitation of its supplier's technology. In inclusive value chains, where imitation is beneficial, the headquarters firm promotes technology diffusion. But in exclusive value chains headquarters seek to limit supplier imitation. The paper analyzes how this distinction affects the returns to offshoring, the welfare effects of technical change, and the social efficiency of knowledge sharing.

Suggested Citation

  • Thomas Sampson, 2024. "Technology Transfer in Global Value Chains," American Economic Journal: Microeconomics, American Economic Association, vol. 16(2), pages 103-146, May.
    • Handle: RePEc:aea:aejmic:v:16:y:2024:i:2:p:103-46
    DOI: 10.1257/mic.20220016
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/mic.20220016
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/mic.20220016.ds
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    File URL: https://libkey.io/10.1257/mic.20220016?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Goh, Ai-Ting, 2005. "Knowledge diffusion, input supplier's technological effort and technology transfer via vertical relationships," Journal of International Economics, Elsevier, vol. 66(2), pages 527-540, July.
    2. Alonso Alfaro-Ureña & Isabela Manelici & Jose P Vasquez, 2022. "The Effects of Joining Multinational Supply Chains: New Evidence from Firm-to-Firm Linkages," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 137(3), pages 1495-1552.
    3. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    4. Lee Branstetter & Kamal Saggi, 2011. "Intellectual Property Rights, Foreign Direct Investment and Industrial Development," Economic Journal, Royal Economic Society, vol. 121(555), pages 1161-1191, September.
    5. Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-266, April.
    6. Jiang, Kun & Keller, Wolfgang & Qiu, Larry D. & Ridley, William, 2024. "International joint ventures and internal technology transfer vs. external technology spillovers: Evidence from China," Journal of International Economics, Elsevier, vol. 150(C).
    7. Kukharskyy, Bohdan, 2020. "A tale of two property rights: Knowledge, physical assets, and multinational firm boundaries," Journal of International Economics, Elsevier, vol. 122(C).
    8. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 577-598.
    9. Blalock, Garrick & Gertler, Paul J., 2008. "Welfare gains from Foreign Direct Investment through technology transfer to local suppliers," Journal of International Economics, Elsevier, vol. 74(2), pages 402-421, March.
    10. Keller, Wolfgang & Ridley, William & Qiu, Larry D. & Jiang, Kun, 2018. "International Joint Ventures and Internal versus External Technology Transfer: Evidence from China," CEPR Discussion Papers 12809, C.E.P.R. Discussion Papers.
    11. Kun Jiang & Wolfgang Keller & Larry D. Qiu & William Ridley, 2018. "International Joint Ventures and Internal vs. External Technology Transfer: Evidence from China," CESifo Working Paper Series 7065, CESifo.
    12. Branstetter, Lee G., 2001. "Are knowledge spillovers international or intranational in scope?: Microeconometric evidence from the U.S. and Japan," Journal of International Economics, Elsevier, vol. 53(1), pages 53-79, February.
    13. Beata Smarzynska Javorcik, 2004. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages," American Economic Review, American Economic Association, vol. 94(3), pages 605-627, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dumont, Michel, 2022. "Public support to business research and development in Belgium: fourth evaluation," MPRA Paper 115418, University Library of Munich, Germany.
    2. D. Dessì & R. Paci, 2023. "The impact of Global Value Chains participation on countries' productivity," Working Paper CRENoS 202305, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.

    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. Gong, Robin Kaiji, 2023. "The local technology spillovers of multinational firms," Journal of International Economics, Elsevier, vol. 144(C).
    2. Roberta Piermartini & Stela Rubínová, 2021. "How much do global value chains boost innovation?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(2), pages 892-922, May.
    3. Lin, Yatang & Qin, Yu & Xie, Zhuan, 2021. "Does foreign technology transfer spur domestic innovation? Evidence from the high-speed rail sector in China," Journal of Comparative Economics, Elsevier, vol. 49(1), pages 212-229.
    4. Gao, Yunshu & Yin, Sisi & Ferrett, Ben & Gao, Bo, 2024. "FDI deregulation and firm innovation: Evidence from firm patents," China Economic Review, Elsevier, vol. 83(C).
    5. Bircan, Çağatay, 2019. "Ownership Structure and Productivity of Multinationals," Journal of International Economics, Elsevier, vol. 116(C), pages 125-143.
    6. Ioannis Bournakis & Jen-Chung Mei, 2023. "Embodied and Disembodied Spillovers from FDI: Sectoral Evidence from Ireland," Journal of Industry, Competition and Trade, Springer, vol. 23(1), pages 59-80, June.
    7. Biancini, Sara & Bombarda, Pamela, 2021. "Intellectual property rights, multinational firms and technology transfers," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 191-210.
    8. Keller, Wolfgang, 2010. "International Trade, Foreign Direct Investment, and Technology Spillovers," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 793-829, Elsevier.
    9. Naoto Jinji & Xingyuan Zhang & Shoji Haruna, 2022. "Deep Integration, Global Firms, and Technology Spillovers," Advances in Japanese Business and Economics, Springer, number 978-981-16-5210-3, June.
    10. Robin Kaiji Gong, 2019. "The Local Technology Spillovers of Multinational Firms," HKUST CEP Working Papers Series 201902, HKUST Center for Economic Policy.
    11. Neil Foster-McGregor, 2012. "Innovation and Technology Transfer across Countries," wiiw Research Reports 380, The Vienna Institute for International Economic Studies, wiiw.
    12. Rita Almeida & Ana M. Fernandes, 2013. "Explaining local manufacturing growth in Chile: the advantages of sectoral diversity," Applied Economics, Taylor & Francis Journals, vol. 45(16), pages 2201-2213, June.
    13. Ioannis Bournakis & Dimitris Christopoulos & Sushanta Mallick, 2018. "Knowledge Spillovers And Output Per Worker: An Industry‐Level Analysis For Oecd Countries," Economic Inquiry, Western Economic Association International, vol. 56(2), pages 1028-1046, April.
    14. Chrysovalantou Milliou, 2014. "Location for Foreign Direct Investment in Vertically Related Markets," Review of International Economics, Wiley Blackwell, vol. 22(2), pages 326-341, May.
    15. Arghya Ghosh & Jota Ishikawa, 2018. "Trade liberalization, absorptive capacity and the protection of intellectual property rights," Review of International Economics, Wiley Blackwell, vol. 26(5), pages 997-1020, November.
    16. Leone, Fabrizio, 2021. "Foreign Ownership and Robot Adoption," CEPREMAP Working Papers (Docweb) 2111, CEPREMAP.
    17. K. Buysse & D. Essers, 2019. "Cheating tiger, tech-savvy dragon : Are Western concerns about “unfair trade” and “Made in China 2025” justified ?," Economic Review, National Bank of Belgium, issue ii, pages 47-70, September.
    18. Mandelman, Federico S. & Waddle, Andrea, 2020. "Intellectual property, tariffs, and international trade dynamics," Journal of Monetary Economics, Elsevier, vol. 109(C), pages 86-103.
    19. Peter Eppinger & Hong Ma, 2023. "Optimal Ownership and Firm Performance: An Analysis of China’s FDI Liberalization," CESifo Working Paper Series 10551, CESifo.
    20. Todo, Yasuyuki, 2011. "Impacts of Aid-Funded Technical Assistance Programs: Firm-Level Evidence from the Indonesian Foundry Industry," World Development, Elsevier, vol. 39(3), pages 351-362, March.

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    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:aea:aejmic:v:16:y:2024:i:2:p:103-46. 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: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.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.