Intra-country Technology Transfer

Meghna Dutta and Sugata Marjit

Indian Economic Review, 2016, vol. 51, issue 1, 117-127

Abstract: Production fragmentation is an important decision for firms. The decision becomes even more imperative because with the decision to fragment the production process is intertwined the decision to transfer technology. This paper models the transfer of technology from a formal manufacturing firm to a low cost firm which do not have the technology to produce the whole good. We show that the wage differential plays an important role in deciding technology transfer. However, if there is a threat of entry by a foreign firm, the decision of the formal sector domestic firm changes significantly wherein, technology transfer then becomes the dominant strategy.

Keywords: Technology Transfer; FDI; Symmetric Duopoly; Outsourcing (search for similar items in EconPapers)
JEL-codes: L24 O33 (search for similar items in EconPapers)
Date: 2016
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