This paper provides a theoretical formalisation of the joint-venture contract, as an alternative to Foreign Direct Investment (FDI), within a Dissipation of Intangible Assets framework. In a two-period model, we discuss how the threat of knowledge spillover shapes the boundaries of a Multinational Enterprise. Similarly to the theoretical findings on the FDI-licensing trade off, we show that the integrated solution is more likely to emerge when know-how easily spills over – i.e. when firms are endowed with more Intangible Assets or they belong to high tech industries. Probit estimates, from a new firm-level dataset, show that Japanese manufacturing operations in Europe are in line with these predictions.

Gattai, V., Molteni, C. (2007). Dissipation of Knowledge and the Boundaries of the Multinational Enterprise. REVIEW OF WORLD ECONOMICS, 143(1), 1-26 [10.1007/s10290-007-0096-x].

Dissipation of Knowledge and the Boundaries of the Multinational Enterprise

GATTAI, VALERIA;
2007

Abstract

This paper provides a theoretical formalisation of the joint-venture contract, as an alternative to Foreign Direct Investment (FDI), within a Dissipation of Intangible Assets framework. In a two-period model, we discuss how the threat of knowledge spillover shapes the boundaries of a Multinational Enterprise. Similarly to the theoretical findings on the FDI-licensing trade off, we show that the integrated solution is more likely to emerge when know-how easily spills over – i.e. when firms are endowed with more Intangible Assets or they belong to high tech industries. Probit estimates, from a new firm-level dataset, show that Japanese manufacturing operations in Europe are in line with these predictions.
Articolo in rivista - Articolo scientifico
Dissipation, Intangible Assets, FDI, joint-venture, Internalisation, Japan
English
1
26
Gattai, V., Molteni, C. (2007). Dissipation of Knowledge and the Boundaries of the Multinational Enterprise. REVIEW OF WORLD ECONOMICS, 143(1), 1-26 [10.1007/s10290-007-0096-x].
Gattai, V; Molteni, C
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/8487
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