Foreign marketing control decisions of firms engaged in west-east technology transfer: a test of the transactions cost hypothesis

Abstract

Businesses engaged in technology transfer from West to Central and East European nations must decide on the extents to which they will contribute to the marketing of the outputs resulting from the technologies they make available to their foreign partners. This can be problematic in situations where recipient enterprises lack rudimentary marketing skills and/or are located in countries with poor marketing services' infrastructures. Western firms face a continuum of choice in relation to this matter, ranging from the situation wherein they retain total control over the marketing of final products, through to allowing recipient businesses to assume complete responsibility for the marketing function. This article reports the results of: (1) an application of the transactions cost model to the analysis of decisions concerning the degrees to which Western companies integrate the marketing of end products emerging from West-East collaborative ventures into their internal operational systems; and (2) a test of the transactions cost hypothesis in relation to the engagement of independent distributors in Central and East European states.