We develop a model in which multinational investors decide about the modes of organization, the locations of production, and the markets to be served. Foreign investments are driven by market-seeking and cost-reducing motives. We further assume that investors face costs of control that vary...

This paper studies why multinational firms often share ownership of a foreign affiliate with a local partner even in the absence of government restrictions on ownership. We show that shared ownership may arise, if (i) the partner owns assets that are potentially important for the investment...

Developing country governments tend to favor joint ventures over other forms of foreign direct investment, believing that local participation facilitates the transfer of technology and marketing skills. However, foreign investors who are technological or marketing leaders in their industries are...

The paper underscores the importance of modeling the dynamics of market entry and helps refine the application of real options in the alliance context by providing a closed-form solution in continuous time to value the overall strategic flexibility

The decision to cooperate within R&D joint ventures is often based on expert advice such advice typically originates in a due diligence process, which assesses the R&D joint ventures profitability, for example, by appraising the achievability of synergies. We show that if the experts who advise...

The decision to cooperate within R&D joint ventures is often based on `expert advice.' Such advice typically originates in a due diligence process, which assesses the R&D joint venture's profitability, for example, by appraising the achievability of synergies. We show that if the experts who...

This chapter surveys the literature on international trade and the protection of intellectual property rights (IPRs) in the global economy. The discussion is organized around the major questions in the field. How does openness to trade affect national incentives for patent protection? What is...

A developing country may attract foreign direct investment (FDI) for (1) technology transfer that increases local firm profits or for (2) wage premiums that benefit workers. The two never occur together but if the country can attract FDI, it is guaranteed either the technology transfer or the...