This paper develops a two-tier oligopoly model in which the entry of a multinational firm results in technology transfer to its local suppliers and also impacts the degree of backward linkages in the local industry. The model endogenizes the multinational's choice between anonymous market...

This paper develops a two-tier oligopoly model in which the entry of a multinational firm results in technology transfer to its local suppliers and also impacts the degree of backward linkages in the local industry. The model endogenizes the multinational's choice between anonymous market...

We construct an oligopoly model in which a multinational firm has a superior technology compared to local firms in the host country. Workers employed by the multinational acquire knowledge of its superior technology and can spread their knowledge to host firms by switching employers. The...

A developing country may attract foreign direct investment (FDI) for (1) technology transfer that increases local firm profits or for (2) wage premiums that benefit workers. The two never occur together but if the country can attract FDI, it is guaranteed either the technology transfer or the...

We construct an oligopoly model in which a multinational firm has a superior technology compared to local firms. Workers employed by the multinational acquire knowledge of its superior technology. The multinational may pay a wage premium to prevent local firms from hiring its workers and thus...

Internalization advantage determines whether firms use foreign direct investment (FDI) or licensing to serve markets abroad. We determine how innovation affects the incentives for internalization and how internalization in turn affects the incentives for innovation. Bigger innovations are kept...