Technology transfer to the developing nations has been predominantly characterized by technology collaborations between the multinationals and the local firms of these developing countries. When a multinational offers a new technology to a local firm, the firms may have different perceptions...

We show that international outsourcing and R&D by the outsourced firm may be either substitutes or complements. Outsourcing increases the R&D investment in small markets and in highly competitive product markets, whereas it decreases the R&D investment in large markets. If the outsourced firm...