Title: Acquisitions versus licensing agreements as vehicles for technology transfer

Authors: Nicolas Forsans, V.N. Balasubramanyam

Addresses: Leeds University Business School, University of Leeds, Maurice Keyworth Building, Leeds LS2 9JT, UK. ' Leeds University Business School, University of Leeds, Maurice Keyworth Building, Leeds LS2 9JT, UK

Abstract: Traditionally, emerging economies have sought to acquire technology and know-how from inward FDI and/or technology licensing agreements. In the recent past, countries such as India and Brazil followed the lead of Japan and resorted to technology licensing agreements in a major way for their requirements of technology and know-how. In recent years, several emerging economies, with India and China being the most prominent, have acquired foreign firms with acquisition of technology and know-how as one of the principal motives for such overseas investments. This paper argues that such overseas acquisitions are a much more efficient and inexpensive source of technology and know-how for countries such as India than licensing agreements.

Keywords: technology licensing agreements; royalties; acquisitions; distortion-free; technology transfer; technology acquisition; technology know-how.

DOI: 10.1504/EJIM.2010.031273

European Journal of International Management, 2010 Vol.4 No.1/2, pp.48 - 55

Published online: 27 Jan 2010 *

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