The pace of technology transfer in anticipation of joint venture breakup

Ngo Long, Antoine Soubeyran and Raphael Soubeyran

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Abstract: 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.

Date: 2009-04-03
Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-02821086v1
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Published in 1. ESNIE Post-doctoral Workshop, European School on New Institutional Economics (ESNIE). FRA.; Association for Public Economic Theory (APET). USA., Apr 2009, Paris, France. 42 p

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Related works:
Working Paper: The Pace of Technology Transfer in Anticipation of Joint Venture Breakup (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02821086

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