We show the effects of entry of a foreign firm on domestic welfare in the presence of licensing. If the entrant is technologically inferior to the incumbent, foreign entry increases domestic welfare for intermediate (sufficiently large) technological differences between the firms under licensing...

We examine whether the market under free entry with a certain entry cost can recover the revenue loss following tariff reduction on an intermediate input. We show that there are four possible ranges of entry cost, from high to low, with four different revenue implications following a reduction...

Many developing countries are liberalizing their economies to allow higher equity participation by the foreign firms. We argue that the possibility of joint venture can reduce the number of technology transfers. Hence, joint venture can reduce the welfare of a host-country by creating higher...