Multinational firms, exclusivity, and backward linkages

Ping LIN; Kamal SAGGI

doi:10.1142/9789813233027_0008

Multinational firms, exclusivity, and backward linkages

Ping LIN, Kamal SAGGI^*

^*Corresponding author for this work

Department of Economics

Research output: Book Chapters | Papers in Conference Proceedings › Book Chapter › Research › peer-review

Abstract

How does the nature of contractual relationships between a multinational and its local suppliers affect backward linkages and welfare in the local industry? We address this question in a two-Tier oligopoly model where a multinational transfers technology to its suppliers if they accept an exclusive contract that precludes them from serving its local rivals. Invited suppliers balance the benefits of gaining access to new technology and the derived demand of the multinational against the opportunity of selling to other local firms. Exclusivity reduces competition among local suppliers and can lower backward linkages and local welfare relative to autarky.

Original language	English
Title of host publication	Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy
Editors	Kamal SAGGI
Publisher	World Scientific
Chapter	8
Pages	189-203
Number of pages	15
ISBN (Electronic)	9789813233027
DOIs	https://doi.org/10.1142/9789813233027_0008
Publication status	Published - Sept 2023

Publication series

Name	World Scientific Studies in International Economics
Volume	82
ISSN (Print)	1793-3641

Bibliographical note

This chapter was originally appeared in Journal of International Economics 71, 206–220.

Publisher Copyright:
© 2006 Elsevier B.V.

Keywords

Backward linkages
Exclusivity
Multinational firms
Vertical technology transfer

Access to Document

10.1142/9789813233027_0008

Cite this

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Multinational firms, exclusivity, and backward linkages. / LIN, Ping; SAGGI, Kamal.
Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy. ed. / Kamal SAGGI. World Scientific, 2023. p. 189-203 (World Scientific Studies in International Economics; Vol. 82).

Research output: Book Chapters | Papers in Conference Proceedings › Book Chapter › Research › peer-review

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Multinational firms, exclusivity, and backward linkages

Abstract

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Bibliographical note

Keywords

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Multinational firms, exclusivity, and backward linkages

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