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摘要
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This paper studies a multinational enterprise’s
(MNE’s) location decision in a vertically related market with endogenous
vertical technology transfer (VTT). We show that, even though VTT is more
costly in a less developed country, an MNE can transfer more technology there
than in a developed country (DC).When the opposite occurs, the MNE sometimes
locates in a DC where, although it faces stronger competition, it obtains the
input at better terms. Therefore, by arguing that the MNE’s decision can be
crucially affected by the upstream market’s outcomes, an alternative
explanation is provided for the commonly observed foreign
direct investment (FDI) in DCs.
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