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Overseas R&D activities of transnational companies

Overseas R&D activities of transnational companies the national territory,' privileges to 'job-work done outside under the designation of 'passive improvement.' The produc- tion of counterpart output could be regarded as passive im- provement and, in the assessment of the output purchased, the value of capital goods and services sold by the country could be deducted.'' More fundamentally, he argues for the need to recognize the value of buy-back arrangements despite protec- tionist measures. "When imports are frozen at a certain lev- el, exceptions can be allowed for the benefit of such opera- tions." It is important to avoid deals biased to the disad- vantage,of acquiring countries which "can happen if the buy- back prices do not cover the cost of the unit transferred." Likewise, the LDC will not benefit "if the output purchased is substituted for other products that it would have sold without the buy-back contract. Finally, the economic cost for the acquiring country could be too high ... if the buy- back contract were to induce it to choose product lines better suited to the requirements of the transferring country'than to its own." Jack N. Behrman, Professor, and William A. Fischer, Assistant Professor, University of North Carolina. Cambridge (Mass.) : Oelgeschlager, Gunn & http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Thunderbird International Business Review Wiley

Overseas R&D activities of transnational companies

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Publisher
Wiley
Copyright
Copyright © 1980 Wiley Subscription Services, Inc., A Wiley Company
ISSN
1096-4762
eISSN
1520-6874
DOI
10.1002/tie.5060220309
Publisher site
See Article on Publisher Site

Abstract

the national territory,' privileges to 'job-work done outside under the designation of 'passive improvement.' The produc- tion of counterpart output could be regarded as passive im- provement and, in the assessment of the output purchased, the value of capital goods and services sold by the country could be deducted.'' More fundamentally, he argues for the need to recognize the value of buy-back arrangements despite protec- tionist measures. "When imports are frozen at a certain lev- el, exceptions can be allowed for the benefit of such opera- tions." It is important to avoid deals biased to the disad- vantage,of acquiring countries which "can happen if the buy- back prices do not cover the cost of the unit transferred." Likewise, the LDC will not benefit "if the output purchased is substituted for other products that it would have sold without the buy-back contract. Finally, the economic cost for the acquiring country could be too high ... if the buy- back contract were to induce it to choose product lines better suited to the requirements of the transferring country'than to its own." Jack N. Behrman, Professor, and William A. Fischer, Assistant Professor, University of North Carolina. Cambridge (Mass.) : Oelgeschlager, Gunn &

Journal

Thunderbird International Business Review – Wiley

Published: Sep 1, 1980

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