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Technology policies, technology transfer by multinational enterprises and R&D activities in LDCs

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Abstract

A simple game theoretic model is developed to study the interaction between the multinational enterprise's (MNE's) technology transfer and the domestic firm's R&D intensity in an LDC. The implications of two technology policies are studied. Two results are derived under certain plausible conditions. First, the subsidy on the MNE's technology transfer may decrease the domestic firm's R&D. Second, the subsidy on the domestic firm's R&D may decrease the technology level transferred by the MNE to the host country. Welfare implications on domestic consumers and producers are also derived.

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Authors and Affiliations

  1. Department of Decision Sciences and Managerial Economics, Faculty of Business Administration, Chinese University of Hong Kong, China

    Michael Ka-Yiu Fung

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  1. Michael Ka-Yiu Fung
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Fung, M.KY. Technology policies, technology transfer by multinational enterprises and R&D activities in LDCs. Open Econ Rev 5, 275–287 (1994). https://doi.org/10.1007/BF01000913

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