The Composition of Licensing Fees and Arrangements as a Function of Economic Development of Technology Recipient Nations
- PDF / 5,139,486 Bytes
- 16 Pages / 523.8 x 799.2 pts Page_size
- 86 Downloads / 134 Views
INTRODUCTION
Whereas these hypotheses appear intuitively straightforward, just what they imply in terms of managerial behavior at the international firm level has to be examined with care. This is then the second objective of this paper, besides mere statistical validation. It is much more accurate to view technology transfer as a relationship rather than as an act. The naivete of assuming technology to be a public good was illustrated by the experience of some East European firms who, having purchased only the technical documentation and patent rights from Western suppliers in the early 1970s, found themselves unable to convert this into viable production output.3 In some instances these firms were later compelled to enter into auxiliary "technical assistance" agreements with the original supplier who sent engineers and other production personnel for extended periods of time. Certainly, this does not have to be true in all cases. Technologically advanced firms will frequently obtain bare patent rights and go on to produce on their own, because they have already "internalized" knowledge from past experience with similar products. But the majority of technology transfers do include organizational and production management assistance besides the transference of rights and documentation.
THE TECHNOLOGY TRANSFER PROCESSAND ITS RELATIONSHIP TOTHE LICENSEE The Licensee Firm's Ability and the Amount of Assistance in the Transfer Package
*Dr.FarokJ. Contractor teaches at the Graduate School of Management, Rutgers University. This paper was submitted and accepted while the author was at The WhartonSchool, University of Pennsylvania. The paper is part of his research on the determinants of compensation patterns and negotiations in international technology licensing, in which he has published several articles and a book, International Technology Licensing: Compensation, Costs, and Negotiations, Lexington Books, 1981, forthcoming. The author would like to thank the MultinationalEnterprise Unitof The WhartonSchool for support given to this research. Lastly, the reviewers suggestions were very helpful. Journal of International Business
Studies, Winter 1980
47
Palgrave Macmillan Journals is collaborating with JSTOR to digitize, preserve, and extend access to Journal of International Business Studies ® www.jstor.org
It is hypothesized that the composition of the technology transfer in terms of the relative proportions of technical and organizational assistance as opposed to trademarks and design rights is directly dependent on the abilities of the recipient firm. For at least two decades, Japanese technology policy discouraged direct foreign investment, which by definition includes the complete ongoing transfer of production and organizational skills to the subisidiary, and substituted for this wherever possible with licensing as a means of obtaining the technology.4 The Japanese also sought to minimize technical assistance arrangements and the leasing of engineers and other personnel. But this was because Japanese firms w
Data Loading...
