A model of technology transfer under taxation

Michelacakis, Nickolas (2014): A model of technology transfer under taxation.

Abstract

In this paper, we construct a model to study the technology transfer decision of a monopolist, with access to a finite number of technologies, under taxation. It is shown that a policy maker in a low-wage developing country cannot always increase the number of technologies transferred from a developed country through a tax on wages-and-invest scheme. We provide conditions for such an intervention to be successful and show that there is no unique choice of tax for doing so.

• Item Type: MPRA Paper
• Language: English
• Keywords: technology transfer, multinational, tax, model
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D42 - Monopoly; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H21 - Efficiency ; Optimal Taxation; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences ; Diffusion Processes

References

Findlay R., ``Relative backwardness, direct foreign investment and the transfer of technology", Quarterly Journal of Economics, 92(1) (1978), 1-16.

Hines Jr., J.R., ``Taxes, technology transfers and the R&D activities of multinational firms", pp. 225--252 in: Feldstein, M,. Hines Jr., J.R., Hubbard, R.G. (Eds.), The effects of taxation on multinational corporations}, The University of Chicago Press, Chicago, IL, 1995.

Kokko A., ``Technology, market characteristics and spillovers", Journal of Development Economics, 43 (1994), 279-293.

Krugman P., ``A model of innovation, technology transfer and the world distribution of income", Journal of Political Economy 87 (1979), 253-266.

Marjit, S., ``A simple model of technology transfer", Economics Letters 26 (1988), 63-67.

Vernon R., ``International investment and international trade in product cycles", Quarterly Journal of Economics 80 (1966), 190-207.