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Vertical technology transfer, bi-sourcing and welfare.

Arijit Mukherjee

Working paper

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 Vertical technology transfer under outsourcing allows a developed country firm to benefit from lower cost of production, the developed country firm also faces the threaf of the imitation under technology transfer.

 

 We show that:

l   Developed firms prefers bi-sourcing under vertical technology.

l   Consumers are worse off under vertical technology transfer.

l   World welfare may decrease.