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The Pace of Technology Transfer in Anticipation of Joint Venture Breakup

Author

Listed:
  • Rapahel Soubeyran

    (INRA-MOISA & IDEP)

  • Ngo Van Long

    (McGill University)

  • Antoine Soubeyran

    (GREQAM, Université de la Méditerranée)

Abstract

This paper studies the properties of joint-venture relationship between a technologically advanced multinational firm and a local firm operating in a developing economy where the ability to enforce contracts is weak. We formulate a dynamic model of principal-agent relationship in which at any point of time the local firm can quit without legal penalties. An early breakup may be prevented if the multinational designs a suitable scheme in which both the pace and aggregate amount of technology transfer deviate from the first-best, and a suitable flow of side payments to encourage the local firm to stay longer.

Suggested Citation

  • Rapahel Soubeyran & Ngo Van Long & Antoine Soubeyran, 2009. "The Pace of Technology Transfer in Anticipation of Joint Venture Breakup," Working Papers 2009.102, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2009.102
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    References listed on IDEAS

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    More about this item

    Keywords

    Technology Transfer; Joint Venture; Developing Economies;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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