International Technology Transfer with an Information Asymmetry and Endogenous Research and Development

Abstract

This paper develops a partial equilibrium monopoly model of international technology transfer in which both the extent of technological change and the mode of technology transfer are endogenous. The model is then used to analyse the welfare effects of various policies that are often recommended or enacted in practice. In general the welfare effects are ambiguous as they depend on the parameters of the model; nevertheless, this paper outlines welfare effects that have not been formalised previously and which are important in any proper analysis of policy regarding international technology transfer.