International Alliances and Technology Diffusion: An Analysis of the Global Tire Industry

Abstract

This paper examines the determinants of international technology agreements in the global tire industry between 1985 and 1996. The empirical investigation combines firm level data on establishment, patenting, and alliance activity with dyad and country specific variables to explain the observed web of partnerships in the industry. My findings indicate that bigger, older, and more diversified firms that possess significant technological capabilities are more likely to provide technology. Smaller and younger firms that exhibit technological and market potential stand a better chance of receiving foreign technologies. Partner similarity in technology and production space, their combined alliance experience, and existing formal ties encourage technology transfers. Differences in terms of patent protection, political democracy and labor standards between recipients and providers' host countries have negative effects on the incidence of inter-firm agreements, while trade barriers increase it.

Keywords: technological agreements, strategic alliances, R&D, patents, global tire industry

JEL Classification: O32, O33, D21, L62, L65, D74