Mandal, Biswajit and Marjit, Sugata (2010): Transaction Cost, Technology Transfer and Mode of Organization.
Download (183kB) | Preview
We develop a monopolistically competitive model for a closed economy without contract incompleteness. We show that if superior technology is not allowed to be transferred, integration would be the best mode of organization given that the transaction cost of intermediate input is sufficiently small. However, transferability of technology calls for adding the dimension of factor intensity of input. We then prove that integration could be the better option only when input production technology is capital-intensive. Thus we validate the empirical claim of Antras (2003) from a perspective other than incomplete contract.
|Item Type:||MPRA Paper|
|Original Title:||Transaction Cost, Technology Transfer and Mode of Organization|
|English Title:||Transaction Cost, Technology Transfer and Mode of Organization|
|Keywords:||Transaction Cost, Technology Transfer, Outsourcing, Organization of Production, Intra-firm Trade.|
|Subjects:||D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior; Transaction Costs; Property Rights
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L23 - Organization of Production
F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization; Manufacturing and Service Industries; Choice of Technology
|Depositing User:||Biswajit Mandal|
|Date Deposited:||02. Jul 2010 13:40|
|Last Modified:||13. Feb 2013 23:39|
Acemoglu, D. Antras, P. and Helpman, E. (2007) – Contracts and Technology adoption, American Economic Review, 97(3), pp 916-943.
Antras, P. (2003) – Firms, Contracts and Trade Structure. Quarterly Journal of Economics, pp 1375-1418.
Antras, P. (2005a) – Property Rights and the International Organization of Production. AEA Papers and Proceedings, pp 25-32.
Antras, P. (2005b) – Incomplete Contracts and the Product Cycle. American Economic Review, 95(4), pp 1054-1073.
Antras, P. and Helpman, E. (2004) – Global Sourcing. Journal of Political Economy, pp 552-580.
Brainard, S. L. (1997) - An Empirical Assessment of the Proximity-Concentration Trade-off between Multinational Sales and Trade, American Economic Review, LXXXVII, pp 520–544.
Dixit, A. K. and Stiglitz, J. E. (1997) -Monopolistic Competition and Optimum Product Diversity, American Economic Review, LXXXVII, pp297–308.
Dunning, John H. (1993) - Multinational Enterprises and the Global Economy, (Cambridge,UK: Addison Wesley Longman, Inc., 1993)
Grossman, Sanford J. and Hart, Oliver D. (1986) - The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration, Journal of Political Economy, XCIV, pp 691–719.
Grossman, Gene M. and Helpman, E. (2002) – Integration Vs. Outsourcing in Industry Equilibrium, Quarterly Journal of Economics ,117(1), pp 85-120.
Grossman, Gene M. and Helpman, E. (2004) – Managerial Incentives and the International Organization of Production, Journal of International Economics,63, pp 237-262.
Grossman, Gene M. and Helpman, E. (2005) – Outsourcing in a Global Economy, Review of Economic Studies, 72(1).
Grossman, Gene M. and Rossi-Hansberg, E. (2008) – Trading Tasks: A Simple Theory of Offshoring, American Economic Review, 98(5), pp 1978-1997.
Markusen, J. R. (1984) - Multinationals, Multi-Plant Economies, and the Gains from Trade, Journal of International Economics, XVI, pp205–226.
Milgrom, P. and Roberts, J. (1993) - Johnson Controls, Inc., Automotive Systems Group: The Georgetown, Kentucky Plant, Stanford Graduate School of Business Case S-BE-9.
Pack, H. and Saggi, K. (2001) – Vertical Technology Transfer via International Outsourcing, Journal of Development Economics, 65(2), pp 389-415.
Zeile, William J. (1997) - U. S. Intra-firm Trade in Goods, Survey of Current Business, LXXVII, pp 23–38.