Licensing of new technology versus direct foreign investment: A general equilibrium analysis
Article
Miyagiwa, K, Young, L. (1997). Licensing of new technology versus direct foreign investment: A general equilibrium analysis
. 2(3), 211-221. 10.1111/1468-0106.00035
Miyagiwa, K, Young, L. (1997). Licensing of new technology versus direct foreign investment: A general equilibrium analysis
. 2(3), 211-221. 10.1111/1468-0106.00035
We are grateful to a referee for helpful comments. In a general equilibrium model with sector-specific capital, a country which licenses new technology and imports capital itself would have lower national income than if it permitted direct investment by foreigners with rights to the technology. However, the reverse can be true if capital is mobile between sectors. Thus, licensing is a poor policy in the short run but can be a good policy in the long run.