Corporate Control, Foreign Ownership Regulations and Technology Transfer

Jota Ishikawa, Yoichi Sugita and Laixun Zhao

The Economic Record, 2009, vol. 85, issue 269, 197-209

Abstract: Multinationals are often required to form joint ventures (JVs) with local firms when entering the host country market. Explicitly taking corporate control into account, we explore the relationship between technology transfer and foreign ownership regulation in the presence of technology spillovers from JVs to local firms. It is shown that foreign ownership regulations may facilitate both technology transfer and spillovers when the multinational has corporate control. Under corporate control by the local partner firm, however, such regulations may hamper technology transfer.

Date: 2009
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