Bounded Entities and (Some of) Their Discontents

Abstract

In his new article An Organizational Theory of International Technology Transfer, Professor Peter Lee offers two richly detailed accounts at once. One is a novel theoretical framework of “bounded entities” that generalizes both from the classic theory of the firm and, of more recent vintage, from the knowledge-based theory of the firm to specify a broader notion of organizations that are bounded in the sense of robust internal integration through corporate or contractual means. In short, such entities are not firms but resemble them in consequential ways. The other account is a practical elaboration of bounded entities that are multinational in nature and so can facilitate cross-border technology transfer. The result is an important contribution to literatures on intellectual property, industrial organization, and the economics of information goods. This Essay offers some initial points of entry into Professor Lee’s arguments. First is to contest his reliance on a view of nonrivalry that, widely held though it is, recent theoretical work calls into question. Second, and related, is to probe a sanguine view about welfare effects from forced technology transfer, especially in the context of U.S.-China relations. Third is to suggest that the present conception of bounded entities as a matter of organizational form has important antecedents in other legal contexts including sovereignty, culture, and personhood—and that these other contexts offer interesting possibilities for further theoretical development.

Keywords: patents, intellectual property, theory of the firm, knowledge-based theory of the firm, COVID-19, vaccines, tacit knowledge, trade secrets, forced technology transfer, U.S.-China trade war