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International licensing and quality‐enhancing technology spillover in a product cycle model

Year: 2024

Type: article

Abstract: This paper examines the effects of an international quality‐enhancing technology spillover on the international industry distribution and innovation in a dynamic North‐South model. When a Southern firm receives a technology transfer from the North through international licensing, the technology spills over to other Southern firms by enhancing the quality of their products. We find that a stronger spillover effect depresses both Northern innovative R&D and Southern adaptive R&D, and thus is welfare‐impairing both for the advanced country and recipient country. The results cast doubt on the common view that regards the technology spillover as a positive externality.

Source: Economic Inquiry

DOI: 10.1111/ecin.13271

Authors: Po‐yang Yu, Hamid Beladi, Hsun Chu, Ching‐chong Lai

Institutions: Institute of Economics, Academia Sinica, The University of Texas at San Antonio, Tunghai University, National Sun Yat-sen University, National Chengchi University

Language: English

Topic: Global trade and economics

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Industry, innovation and infrastructure

Open Access status: bronze

Funders: National Science and Technology Council, Institute for Information Industry, Ministry of Science and Technology, Taiwan