Wholly owned subsidiary versus technology licensing in the worldwide chemical industry

Journal Article (Journal Article)

This paper empirically analyzes the determinants of the choice between wholly owned subsidiary and technology licensing as a strategy for expansion abroad. We use a new and comprehensive database on worldwide plant level investments in the chemical industry during the 1981–1991 period. We find that both cultural distance and the presence of other potential licensors favor the use of licensing as a strategy for expanding abroad, whereas, prior experience favors the choice of wholly owned subsidiary. An implication of this study is that competition in the market for technology can foster the international diffusion of technology through the use of arm's length agreements. © 2000, Academy of International Business. All rights reserved.

Full Text

Duke Authors

Cited Authors

  • Arora, A; Fosfuri, A

Published Date

  • January 1, 2000

Published In

Volume / Issue

  • 31 / 4

Start / End Page

  • 555 - 572

Electronic International Standard Serial Number (EISSN)

  • 1478-6990

International Standard Serial Number (ISSN)

  • 0047-2506

Digital Object Identifier (DOI)

  • 10.1057/palgrave.jibs.8490922

Citation Source

  • Scopus