Intra-Country Technology Transfer
Dutta, M. and Marjit, S. (2016), "Intra-country Technology Transfer", Indian Economic Review, Vol. LI, No.1–2, pp. 117-127
12 Pages Posted: 12 Apr 2019 Last revised: 25 Aug 2019
Date Written: May 19, 2016
Production fragmentation is an important decision for firms. The decision becomes even more imperative because with the decision to fragment the production process is intertwined the decision to transfer technology. This paper models the transfer of technology from a formal manufacturing firm to a low cost firm which do not have the technology to produce the whole good. We show that the wage differential plays an important role in deciding technology transfer. However, if there is a threat of entry by a foreign firm, the decision of the formal sector domestic firm changes significantly wherein, technology transfer then becomes the dominant strategy.
Keywords: Technology Transfer, FDI, Symmetric Duopoly, Outsourcing
JEL Classification: L24, O33
Suggested Citation: Suggested Citation