Entry Mode, Ownership Constraint, and R&D with Spillover

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Title:	Entry Mode, Ownership Constraint, and R&D with Spillover
Authors:	王雅津 (Ya-Chin Wang) Leonard F. S. Wang
Keywords:	Entry Mode Direct Entry Merger and Acquisition R&D Spillover Ownership Constraint
Date:	2009-07
Issue Date:	2009-11-15 01:30:11 (UTC+8)
Abstract:	In this paper, we examine how R&D costs, technological spillover, market size, and ownership constraint affect the choice of foreign entry, R&D level, and host country’s welfare. In a full foreign ownership model, the foreign firm tends to raise the likelihood of choosing direct entry when the R&D spillover is larger. The R&D investment decreases when its spillover effect becomes larger. In an extreme case, when the typical domestic firm fully absorbs foreign technology, the foreign firm always provides more R&D under acquisition than under direct entry. In addition, for the foreign firms as well as the host country, there is no difference between choosing direct entry or acquisition when the market is extremely competitive. With regulation on foreign ownership, the R&D spillover creates the possibility of choosing direct entry for the foreign firm, which is different from the results obtained in Mattoo et al. (2004).
Appears in Collections:	[金融管理系] 會議論文

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