Tariffs, technology licensing and adoption
Journal
International Review of Economics and Finance
Journal Volume
43
Pages
234-240
Date Issued
2016
Author(s)
Abstract
This paper develops a two-country Cournot duopoly model to investigate the implications of international technology licensing. It is shown that if the tariff imposed by the domestic country is high, it is optimal for the foreign firm to adopt an inferior technology for its production when it licenses its most advanced technology to the domestic firm. Such a licensing arrangement may improve welfare of the two countries.
Type
journal article