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Taxation and the transfer of technology by multinational firms

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  • Huizinga, H.P.

    (Tilburg University, School of Economics and Management)

Abstract

This paper analyzes a multinational's transfer of technology to a foreign subsidiary for the case where there is a risk of expropriation. An expropriation is assumed to give rise to competition between the parts of the previous multinational enterprise. To reduce the benefit of expropriation, the multinational generally transfers an inferior technology, even if the transfer of technology is costless. With a reduced benefit of expropriation, the multinational has to pay lower taxes to prevent expropriation. The multinational optimally transfers additional technology over time if it has a finite horizon in the country. For this case, tax payments also are shown to increase over time in a tax-holiday-like fashion.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Huizinga, H.P., 1995. "Taxation and the transfer of technology by multinational firms," Other publications TiSEM 02146d67-43bd-4201-9ef2-2, Tilburg University, School of Economics and Management.
    • Handle: RePEc:tiu:tiutis:02146d67-43bd-4201-9ef2-2c77ac69531d
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    References listed on IDEAS

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    1. Cole, Harold L. & English, William B., 1991. "Expropriation and direct investment," Journal of International Economics, Elsevier, vol. 30(3-4), pages 201-227, May.
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    6. James R. MARKUSEN, 2021. "Multinationals, Multi-Plant Economies, And The Gains From Trade," World Scientific Book Chapters, in: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models, chapter 1, pages 3-24, World Scientific Publishing Co. Pte. Ltd..
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    8. Wright, Donald J., 1993. "International technology transfer with an information asymmetry and endogenous research and development," Journal of International Economics, Elsevier, vol. 35(1-2), pages 47-67, August.
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    Cited by:

    1. Latzer, Hélène, 2013. "Bridging the technology gap with limited human capital resources," Economic Modelling, Elsevier, vol. 35(C), pages 175-184.
    2. Yeonseung Chung, 2008. "On the Convergence of Productivity Between Large Enterprise and SMEs," Korean Economic Review, Korean Economic Association, vol. 24, pages 459-475.
    3. Kamal Saggi, 2002. "Trade, Foreign Direct Investment, and International Technology Transfer: A Survey," The World Bank Research Observer, World Bank, vol. 17(2), pages 191-235, September.
    4. Müller, Thomas, 2003. "The Multinational Enterprise," Munich Dissertations in Economics 799, University of Munich, Department of Economics.
    5. Helene, LATZER, 2006. "Foreign Direct Investment and the Nature of the Imitation Process," Discussion Papers (ECON - Département des Sciences Economiques) 2006012, Université catholique de Louvain, Département des Sciences Economiques.

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