The performance of technology licensing and foreign direct investment in international technology transfer
Description
The firms of developing countries can obtain the foreign advanced technologies through licensing as well as assimilate the knowledge spilled from advanced firms of developed countries. Through the analysis of these two potential avenues of development, my dissertation explores whether and how the firms of developing countries can benefit from international technology transfer Addressing the imitation threat and double-sided moral hazard that damage the quality of licensed technology, chapter I reveals that the capability of royalty to motivate the licensor's effort affects the pricing terms of licensing contracts, the incentive of licensee to choose imitation, the efforts input to the transfer, and the quality of licensed technology. The chapter shows that the developing countries should target the licensors which can provide highly effective work and then protect the intellectual property of these licensors for improving the performance of licensed technology Chapter II studies the interactions between the international strategies and R&D investments of firms from developing countries and developed countries. Shown in this chapter, the firms of developing countries may produce in the developed countries only if the technological spillover in the developed countries is significant enough to overcome the disadvantages of the low exporting costs and the expensive production materials in developed countries. The potential significant spillover discourages the foreign direct investments (FDI) from the developed countries, although such spillover is necessary for the developing countries to benefit from the incoming FDI Chapter III studies the source, diffusion, and absorption of the spilled knowledge. A theoretical model with a nonlinear spillover is developed to explain the varied results about spillover effect found in empirical research. The chapter demonstrates how the R&D investments of developing countries are affected by the factors determining the technological spillover, which are the environment for information diffusion, the physical distance between firms, the absorptive capacity of firms of developing countries, and the gap between the technology endowment of firms of developing countries and the sophistication of the technologies employed by the multinational enterprises (MNE). The chapter shows that the developing countries should be cautious when implementing beneficial FDI policies to attract MNE for spillover