Transaction Cost, Technology Transfer and Mode of Organization

Biswajit Mandal and Sugata Marjit

MPRA Paper from University Library of Munich, Germany

Abstract: We develop a monopolistically competitive model for a closed economy without contract incompleteness. We show that if superior technology is not allowed to be transferred, integration would be the best mode of organization given that the transaction cost of intermediate input is sufficiently small. However, transferability of technology calls for adding the dimension of factor intensity of input. We then prove that integration could be the better option only when input production technology is capital-intensive. Thus we validate the empirical claim of Antras (2003) from a perspective other than incomplete contract.

Keywords: Transaction Cost; Technology Transfer; Outsourcing; Organization of Production; Intra-firm Trade. (search for similar items in EconPapers)
JEL-codes: D23 F12 L23 O14 (search for similar items in EconPapers)
Date: 2010-02, Revised 2010-06
New Economics Papers: this item is included in nep-ipr and nep-pr~
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