Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/74213 
Authors: 
Year of Publication: 
2005
Series/Report no.: 
Nota di Lavoro No. 122.2005
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
This paper provides a theoretical formalisation of the joint-venture contract, as an alternative to Foreign Direct Investment (FDI), within a Dissipation of Intangible Assets framework. In a two-period, two-country equilibrium model, we discuss how the threat of knowledge spillover shapes the boundaries of a Multinational Enterprise. Similarly to the theoretical findings on the FDI-licensing trade off, we show that Foreign Direct Investment is more likely to emerge when know-how easily spills over – i.e. when firms are endowed with more intangible assets or they belong to high tech industries. Probit estimates, from an entirely new firm-level dataset, constructed by the author, show that the experience of Italian multinationals in Asia is in line with our theoretical predictions.
Subjects: 
Intangible assets
Internalisation
FDI
Joint-venture
Asia
JEL: 
F23
C25
O5
Document Type: 
Working Paper

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