This paper looks at the strategic behavior of multinational corporations (MNCs) in less developed countries. We start with the premise that MNCs have superior technologies, and that domestic firms lack informational access to this superior technology. Workers trained on the MNC technology can...

Agency problems in inter-firm trading relationships are severe in developing and transitional economies because of the limited decentralized information that can support contract enforcement and because the timing of intermediate goods production and payment differ. We derive the consequences...