Division of Innovative Labor Between the U.S. and Japan in Asia‐Pacific Technology Markets: Evidence from the Licensing Contracts of American and Japanese Firms with Korean Firms*

Abstract

This paper empirically investigates the role of the U.S. and Japan in the Asia‐Pacific technology market, in particular, their relationship with Korea based on a survey data set.Korean firms tend to import their technologies from the U.S. rather than from Japan for new business expansion and enhancing technological capabilities, while Japanese technol‐ogies are more likely to be imported for domestic market expansion through quality improvement and production capacity expansion. The relationship between the licensor and licensee is more likely to be vertical for the technologies imported from the U.S. than Japanese ones. Compared with the technologies from the U.S., Japanese technologies are cheaper and are easier to find alternatives. The licensees that imported technologies from Japan tend to care more about the current or ongoing relation‐ship with existing relational networks such as the existing licensor and/or joint‐venture partners as the information channel for technology import decisions. U.S. technologies have been more likely to be the pathfinder for Korean companies in developing new markets, developing new products, upgrading technological capabilities. Technologies from the U.S. and Japan have been utilized for different market segments with different strategic purposes.