Research On Foreign Direct Investment And Technology Licensing Under Technology Spillovers Circumstances

This paper studies foreign direct investment and licensing under thecircumstance of technology spillovers.As for foreign direct investment, this paper studies three facets under oligopolymodel:Firstly, in the presence of technology spillovers, the paper studies the investmentmode when a firm conducts foreign direct investment, i.e., how to choose betweengreenfield investment and merger and acquisition. When the extent of technologyspillover is high, the optimal investment mode is Greenfield investment. When theextent of technology spillover is low, the optimal investment mode is merger andacquisition. The absorbing capacity is an important factor which has an effect onspillover and the investment mode of a firm, and the R&D expenditure is the keyfactor to the absorbing capacity of a firm. In the extension model in which the localfirm can make R&D, the investment mode of multinational firms is dependent on theproduction cost and R&D efficiency before R&D. This paper also utilizes paneldata to conduct an empirical test for the results of theoretic model.Secondly, this paper studies the foreign direct investment of atechnology-seeking firm and the IPRspolicy of a developed country. The result showsthat only when the whole productivity of technology-seeking firm is higher than firmsin host country, can the FDI success. Contrary to the conventional research resultsthat the stringent IPRspolicy is helpful to developed country, this paper shows thatthis might not be the case at. When the total productivity of the investing firm ishigher than the firm in the developed country, a weak IPRspolicy can increase thesocial welfare.Thirdly, the paper studies the influence of the second time technology spilloverson foreign direct investment and social welfare. Contrary to the effect of the first timespillovers, the second time spillovers make the firm more inclined to choose exprotinstead of FDI. As for host country, regardless of the extent of the second timespillovers, the social welfare is lower than that without it. As for home country, theeffect of the second time spillovers on socical welfare have a U pattern, when the extent of the second time technology spillovers is low, the social welfare is decreasingwith an increase of technology spillovers, and lower than that without it. When theextent of second time technology spillovers is high, the social welfare is increasingwith the increasing of technology spillovers, and higher than that without it at last.As for licensing, the paper studies a manufacturing firm how to license thetechnology in the presence of a market structure including upstream and downstreammarket and technology spillovers, with the firm having technolgy to decrease the costof manufacturing final and intermediate product. The result shows that the firmalways licenses the upstream and downstream firms under two-part tariff. The extentof technology spillovers have an effect on the licensing motivation of the firm, atsome circumstance, the higher extent of technology spillovers, the higher thelicensing motive. It increases the consumer surplus and social welfare that licensingthe upstream and downstream firms at the same time or only licensing the upstreamfirm. The consumer surplus dose not change or decreases, and the social welfaremaybe increase or decrease when licensing the downstream firm.