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Knowledge diffusion, input supplier's technological effort and technology transfer via vertical relationships

Ai Ting Goh

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Abstract: This paper studies the effect of knowledge diffusion on the incentives for developed countries' (DC) firms to undertake costly technology transfer to their less developed countries' (LDC) suppliers whose cost of production varies inversely with their technological effort. When the incumbent supplier's cost of improving efficiency is high, diffusion of knowledge to other potential input producers encourages technology transfer, as it increases upstream competition. However, and in sharp contrast to existing literature, when technological effort is less costly, knowledge diffusion discourages technology transfer by reducing the incumbent supplier's technological effort.

Keywords: Technology transfer; Technological effort; Developing countries; Knowledge diffusion; Buyer-supplier (search for similar items in EconPapers)
Date: 2005-07
Note: View the original document on HAL open archive server: https://hal-hec.archives-ouvertes.fr/hal-00463409
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Published in Journal of International Economics, Elsevier, 2005, Vol.66,n°2, pp.527-540. ⟨10.1016/j.jinteco.2004.06.010⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00463409

DOI: 10.1016/j.jinteco.2004.06.010

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