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Strategic
licensing, exports, FDI, and host country welfare |
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Uday Bhanu Sinha |
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This paper analyses the preference of a
foreign firm over serving a host country market and its impact on the host
country welfare. It shows that the foreign firm can choose licensing its
superior technology to a host firm strategically which influences the foreign
firm¡¦s subsequent preference over exporting and FDI. The effect on the host
country welfare depends on the structure of license fee and it is show that
strategic licensing might lead to welfare loss for the host country. To this
end this paper also prescribes either an optimal tariff scheme or a ban on
licensing to maximize the lost country welfare. |
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