The Pace of Technology Transfer in Anticipation of Joint Venture Breakup
Ngo Long and
Antoine Soubeyran ()
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Rapahel Soubeyran: INRA-MOISA & IDEP
Authors registered in the RePEc Author Service: Raphaël Soubeyran ()
No 2009.102, Working Papers from Fondazione Eni Enrico Mattei
This paper studies the properties of joint-venture relationship between a technologically advanced multinational firm and a local firm operating in a developing economy where the ability to enforce contracts is weak. We formulate a dynamic model of principal-agent relationship in which at any point of time the local firm can quit without legal penalties. An early breakup may be prevented if the multinational designs a suitable scheme in which both the pace and aggregate amount of technology transfer deviate from the first-best, and a suitable flow of side payments to encourage the local firm to stay longer.
Keywords: Technology Transfer; Joint Venture; Developing Economies (search for similar items in EconPapers)
JEL-codes: O3 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2009.102
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