Multinationals, technology transfer and domestic R&D incentives

Campos, Jaime F. (2007) Multinationals, technology transfer and domestic R&D incentives. PhD thesis, University of Nottingham.

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Abstract

This thesis is a collection of four essays which aim to make a contribution to the theoretical analysis of the impact that flows of FDI have on fast growing developing countries, in which foreign firms not only invest but also set up R&D facilities. More precisely, we study these issues in a context in which both the mode of foreign expansion and the incentives to innovate are endogenously determined.

In particular, this thesis intends to contribute to answer the following key questions:

1. What is the impact that subsidiaries of Multinational Corporations (MNC) have on some of the key determinants for the host country technological development (e.g. Research and Development investment)?

2. What are the welfare implications of the different ways in which the MNC can serve the local economy (e.g. Exports, Subsidiary)?

3. What mechanisms can host countries implement to increase the benefits of the presence of MNC?

Chapter 1 surveys the theoretical literature on the impact that the presence of MNC have on the host country economy, in particular on his technological development. This chapter identifies gaps in the theoretical literature that this thesis intends to fill up. Chapters 2, 3 and 4 develop theoretical models that analyse the strategic interaction between a MNC and a domestic firm. The analysis focuses on the effect of this interaction on the incentives that domestic firms have to undertake R&D investment. Also, we analyse the impact of the different scenarios on the domestic welfare and obtain implications on industrial policy. A common feature of these models is the utilisation of a game theoretic approach. We analyse multistage oligopoly models where firms choose simultaneously R&D investment and prices (or output) in the second and third stages, while in the first stage the foreign firm decide the mode of serving the domestic market: either by exporting or Foreign Direct Investment. Chapter 2 analyses these issues in the context of a vertically differentiated market, chapter 3 in the context of a horizontally differentiated product with R&D spillovers from the Multinational Corporation Subsidiary to the domestic firm. Finally, chapter 4 investigates research joint ventures in a duopoly market with R&D spillovers and the presence of a MNC's subsidiary.

Item Type:Thesis (PhD)
Supervisors:Falvey, R.E.
Uncontrolled Keywords:International business enterprises, Research and development projects
Faculties/Schools:UK Campuses > Faculty of Social Sciences, Law and Education > School of Economics
ID Code:951
Deposited By:Mrs Maxine Blythe
Deposited On:20 Oct 2009 15:52
Last Modified:20 Oct 2009 15:52

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