Discussion Paper Details

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Title: Technology Transfer and Spillovers in International Joint Ventures

Author(s): Thomas Müller and Monika Schnitzer

Publication Date: October 2003

Keyword(s): foreign direct investment, joint ventures, multinational enterprise, ownership structure, spillovers and transition economies

Programme Area(s): Industrial Organization, Institutions and Economic Performance, International Trade and Regional Economics and Transition Economics

Abstract: This paper analyzes the effects of a potential spillover on technology transfer of a multinational enterprise and on the host country policy. In particular, we examine how both parties? incentives can be controlled through the ownership structure in an international joint venture. In contrast to existing arguments, we show that spillovers must not always have negative effects on technology transfer and they may be efficiency-improving. Moreover, there are circumstances where a joint venture is mutually beneficial. Surprisingly, however, we find that despite the prospect of spillovers, a joint venture is sometimes not in the interest of a host country.

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Bibliographic Reference

Müller, T and Schnitzer, M. 2003. 'Technology Transfer and Spillovers in International Joint Ventures'. London, Centre for Economic Policy Research.