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The pace of technology transfer in anticipation of joint venture breakup

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  • Ngo van Long

    (Department of Economics - PUC-Rio - Pontifícia Universidade Católica do Rio de Janeiro [Brasil] = Pontifical Catholic University of Rio de Janeiro [Brazil] = Université catholique pontificale de Rio de Janeiro [Brésil])

  • Antoine Soubeyran

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Raphael Soubeyran

    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

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

  • Ngo van Long & Antoine Soubeyran & Raphael Soubeyran, 2009. "The pace of technology transfer in anticipation of joint venture breakup," Post-Print hal-02821086, HAL.
    • Handle: RePEc:hal:journl:hal-02821086
    Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-02821086
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    References listed on IDEAS

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    JEL classification:

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

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