North-South Technology Transfer Research Articles

Inflation and Innovation in a Schumpeterian Economy with North–South Technology Transfer

AbstractThis study analyzes how inflation affects innovation and international technology transfer via cash‐in‐advance constraints on R&D. We consider a North–South quality‐ladder model that features innovative Northern R&D and adaptive Southern R&D. We find that higher Southern inflation causes a permanent decrease in technology transfer, a permanent increase in the North–South wage gap, and a temporary decrease in the Northern innovation rate. Higher Northern inflation causes a temporary decrease in the Northern innovation rate, a permanent decrease in the North–South wage gap, and ambiguous effects on technology transfer. Finally, we calibrate the model to China–U.S. data to perform a quantitative analysis.

Technology transfer and cooperation for low carbon energy technology: Analysing 30 years of scholarship and proposing a research agenda

While North-South technology transfer and cooperation (NSTT) for low carbon energy technology has been implemented for decades, South-South technology transfer and cooperation (SSTT) and South-North technology transfer and cooperation (SNTT) have only recently emerged. Consequently, the body of literature on NSTT is mature, while the body on SSTT and SNTT is still in its infancy. This paper provides a meta-synthesis of the scholarly writings on NSTT, SSTT and SNTT from the past 30 years. We specifically discuss core drivers and inhibitors of technology transfer and cooperation, outcomes as well as outcome determinants. We find policies and practices for low carbon development to be the main driver, both pushed by governments and international aid programs, as well as by firms that are interested in expanding overseas. Inhibitors include a non-existent market in the host countries and the abundance of cheap fossil fuel resources that price out renewables. The literature is divided on whether intellectual property rights are inhibitors or drivers of technology transfer to the Global South. Outcomes of technology transfer and cooperation are mixed with approximately one-third of instances reported as successful technology transfer and another one-third reported as failures. Core key success factors were identified as suitable government policies as well as adequate capacities in the recipient country. This analysis is then followed by an introduction of the papers of the special issue 'South-South Technology Transfer and Cooperation for Low Carbon Energy Technologies’. Finally, a research agenda for future work on NSTT, SSTT and SNTT is proposed.

Capturing the rains: Comparing Chinese and World Bank hydropower projects in Cameroon and pathways for South-South and North South technology transfer

China is an increasingly prominent actor in infrastructure development in the Global South. Hydropower, as a renewable energy source, is a key area in which Chinese technological cooperation and finance can contribute to sustainable growth. However, many of China's overseas hydropower projects remain controversial for their social and environmental impacts.This paper presents a comparative case study of a China Exim Bank-financed project and a World Bank-led multilateral project – both located in Cameroon – to highlight the commonalities and differences between China as a rising power and “traditional” Northern donors in the field of hydropower development. It examines the financiers’ influence on tendering, financing and implementation, as well as pathways of technology transfers undertaken. While both projects adhere to domestic regulations, the rigor of norm-enforcement and the level of involvement from financiers differ considerably, with implications for the projects’ construction, labor-relations and potential for technology transfers.This study contributes to the understanding of the developing norms and practices surrounding environmental and social impact management and technology transfers in South-South cooperation by engaging in a comparison of China, a rising power, and “traditional” donors such as the World Bank, who are re-emerging in the field of infrastructure development.

Comparing North-South technology transfer and South-South technology transfer: The technology transfer impact of Ethiopian Wind Farms

The paper compares HydroChina’s involvement in Adama Wind Farm in Ethiopia as a case of South-South technology transfer to that of Vergnet, a French firm involved in the construction and financing of Ashegoda Wind Farm, as a case of North-South technology transfer. The impact of technology transfer is evaluated along four dimensions: capital goods and equipment, direct skill transfer, indirect skill transfer, and knowledge and expertise. In recent years, rise of south-south technology transfer led by Chinese-financed overseas renewable energy projects in developing countries has rekindled debate on motivations and impacts of China’s increasing engagements. However, the literature on impact of technology transfer in renewable energy is scarce and non-comparative in nature. This paper aims to fill in the gap. Through interviews with key stakeholders and detailed analysis of the negotiation and construction processes in both projects, the research shows although HydroChina shared a higher level of knowledge and expertise to local engineers and university scholars during the construction phase, Vergnet formed stronger long-term skill transfer linkages with local university students and employed a larger share of local workers than HydroChina. It is crucial to note the research presented here shows that host government, rather than donor country, has considerable capacity and can play a vital role in negotiating and maximizing technology transfer. In fact, the host government’s expectations and demands contributed to the variations in technology transfer patterns. The paper concludes with a discussion of potential opportunities and challenges, and policy recommendations to facilitate international technology transfer.

China's rise: Challenging the North-South technology transfer paradigm for climate change mitigation and low carbon energy

Historically, technology transfer from the global North to China played a large role in renewable energy pathways in China, particularly for wind energy, partly also for solar energy. Yet, the rise of China and other emerging economies means a shift away from a reliance on technology transfer and production capabilities to strengthening indigenous innovation capabilities. Drawing on evidence from the hydropower, solar and wind energy industry in China, the paper introduces the concept of ‘geographies of technology transfer and cooperation’ and challenges the North-South technology transfer and cooperation paradigm for low carbon innovation and climate change mitigation. The empirical evidence shows that for low carbon innovation, the conception that China is lacking behind in innovation capabilities is partly outdated. Instead, there is an increase in indigenous innovation capabilities, resulting in South-South technology transfer and cooperation as well as elements of ‘reverse’ South-North technology cooperation.

Is the risk of North–South technology transfer failure an obstacle to a cooperative climate change agreement?

We setup a stylized model with endogenous North–South technology transfer for climate change mitigation. We theoretically identify the driving factors that enhance or hinder cooperation with socially optimal binding targets on emissions and on investment in technology transfer. We find that the risk of technology transfer failure creates an obstacle to the achievement of the cooperative agreement: under cooperation, the South will have to fulfill the emissions target at high costs if technology transfer fails. Under non-cooperation without any binding targets, the North still has an intrinsic motivation to reduce emissions in the South at low costs via technology transfer; and the South does not have the pressure to fulfill an emissions target. As a result, non-cooperation shifts part of the costs of a technology transfer failure from the poor South to the rich North and can thus be preferable for the South. Two policy implications for achieving the cooperative solution are derived: first, the South should be insured against or compensated for a technology transfer failure. Second, an agreement on technology transfer should be formulated in terms of emissions reductions or low-carbon technology capacities that are to be achieved rather than in terms of monetary payments with uncertain effects on emissions. We discuss the model results in the context of empirical facts and current developments.

External sources of clean technology: Evidence from the Clean Development Mechanism

New technology is fundamental to sustainable development. However, inventors from industrialized countries often refuse technology transfer because they worry about reverse-engineering. When can clean technology transfer succeed? We develop a formal model of the political economy of North–South technology transfer. According to the model, technology transfer is possible if (1) the technology in focus has limited global commercial potential or (2) the host developing country does not have the capacity to absorb new technologies for commercial use. If both conditions fail, inventors from industrialized countries worry about the adverse competitiveness effects of reverse-engineering, so technology transfer fails. Data analysis of technology transfer in 4,894 projects implemented under the Kyoto Protocol’s Clean Development Mechanism during the 2004–2010 period provides evidence in support of the model.

North–South technology transfer in unionised multinationals

We study how incentives for North–South technology transfers in multinational enterprises are affected by labour market institutions. If workers are collectively organised, incentives for technology transfers are partly governed by firms' desire to curb trade union power. Higher union bargaining power in the North leads to more technology transfer along two different dimensions – skill upgrading of Southern workers and quality upgrading of products produced in the South – possibly to the extent that the utility of Northern workers decline. Policies to raise the wage levels of Southern workers might spur technology transfer if wages are initially very low, but have a dampening effect on North–South technology transfer once the Southern wage level has surpassed a certain threshold level. These conclusions are reached in a setting where a unionised multinational multiproduct firm produces vertically differentiated products in Northern and Southern subsidiaries.

Externalities in North-South technology transfer: the case of CNG engines in Iran

This contribution focuses on illuminating the challenges and difficulties of North-South technology transfer. The central message of this paper is that North-South technology transfer is not simply a contract between two transacting firms and does not depend only on intra-firm and inter-firm factors. The process may also be influenced by a number of external factors, beyond the control or power of project managers. However, understanding of these external factors greatly influences the success of firms' technological development. These externalities could arise from North-South contexts variances, international atmosphere and even by different levels of both sides' actors involved in the process. Using an in-depth case study analysis for collaboration between Iranian and German companies, this article develops a clearer understanding of external factors which affect the cross-border technology transfer process.

Labour Productivity and Energy Use in a Three-Sector Model: An Application to Egypt

This article presents a model of a developing economy with three sectors — industry, agriculture and energy. Industry and energy are assumed to be demand-constrained, but agriculture supply-constrained. The model highlights: (a) structural transformation, through labour transfer from agriculture to industry; (b) inflation, driven by the interaction of demand and the supply constraint in agriculture; and (c) the link between energy use and labour productivity. Employing a Kaldor-Verdoorn productivity rule in industry augmented with energy intensity — energy per unit of labour — as an argument, we emphasize that labour productivity growth is driven by energy intensity rather than energy productivity growth. As a consequence, emissions reduction without North–South technology transfer and financial assistance costs growth.

North-South Technology Transfer in Unionised Multinationals

We study how incentives for North-South technology transfers in multinational enterprises are affected by labour market institutions. If workers are collectively organised, incentives for technology transfers are partly governed by firms' desire to curb trade union power. This will affect not only the extent but also the type of technology transfer. While skill upgrading of southern workers benefits these workers at the expense of northern worker welfare, quality upgrading of products produced in the South may harm not only northern but also southern workers. A minimum wage policy to raise the wage levels of southern workers may spur technology transfer, possibly to the extent that the utility of northern workers decline. These conclusions are reached in a setting where a unionised multinational multiproduct firm produces two vertically differentiated products in northern and southern subsidiaries, respectively.

EDCTP: a genuine north–south partnership

EDCTP: a genuine north–south partnership

Tariffs and Technology Transfer through an Intermediate Product*

AbstractWe examine the relationship between tariffs and North–South technology transfer in an oligopoly model when technology is embodied in a key component that only North firms can produce. They may have an incentive to transfer their technologies to South firms even if the South's licensing market is restricted or if intellectual property right protection is imperfect in the South. Interestingly, a decrease in the tariff on the final good as well as an increase may induce technology transfer. Our analysis suggests that the South should implement pro‐competitive policies to induce technology transfer and enhance welfare.

A Road Map for Regional Emissions Trading in Asia

Because of the urgency of emerging science, developed and developing countries in Asia and around the world will soon be asked to make greater commitments to reduce greenhouse gas (GHG) emissions. In the case of Asia, emissions trading schemes present significant financial opportunities and regulatory obstacles for Asian businesses, as well as new challenges in regional and global co-operation on North–South technology transfer and development. Despite these challenges and opportunities, this article argues that there is still a dearth of academic literature addressing the use of these mechanisms in Asia as a strategy for GHG reduction and development promotion, and seeks to provide an overview and to suggest possible solutions in order to spur further climate change-related research, dialogue and action in the context of Asia.

Introduction: Globalization–Poverty Channels and Case Studies from Sub-Saharan Africa

In 2004 the United Nations University World Institute for Development Economics Research (UNU-WIDER) embarked on a large-scale research project on the ‘Impact of Globalization on the World’s Poor’ co-directed by Machiko Nissanke and Erik Thorbecke. The first conference was essentially conceptual in nature, meant to understand better the various mechanisms and channels through which globalization affects the poor either directly or indirectly. The other three conferences focused on each of the major regions of the developing world: Asia, Africa and Latin America. Theobjectivesofthisintroductionarethreefold:first,toreviewbrieflyhow the forces of globalization influence poverty in general; second, to describe and discuss the main transmission channels and mechanisms; and third to analyze the impact of globalization on Africa and present an overview of the six Africa case studies included in this issue. 1. The Impact of Globalization on the World’s Poor Globalization provides a strong potential for a major reduction in poverty in the developing world because it creates an environment conducive to fastereconomicgrowthandtransmissionofknowledge. 1 However,structural factors and policies within the world economy and national economies have impeded the full transmission of the benefits of the various channels of globalization for poverty reduction. In particular sub-Saharan Africa (SSA) hasbeenrelativelylessaffectedbytheforcesofglobalizationthanotherparts of the world. World income distribution continues to be very unequal and many poor countries particularly in Africa are stagnating. Moreover, there is much empirical evidence that openness contributes to more within-country

Strategic Intellectual Property Rights Policy and North-South Technology Transfer

This paper analyzes welfare implications of protecting intellectual property rights (IPR) in the framework of TRIPS for developing countries (South) through its impact on innovation, market structure and technology transfer. In a North-South trade environment, the South sets its IPR policy strategically to manipulate multinationals’ decisions on innovation and location. Firms can protect their technology by exporting or risk spillovers by undertaking FDI to avoid tariffs. A stringent IPR regime is always optimal for the South as it triggers technology transfer by inducing FDI in less R&D-intensive industries and stimulates innovation by pushing multinationals to deter entry in high-technology sectors.

Optimum tariffs and patent length in a model of North–South technology transfer

We study a developing country's choice of optimum tariffs and patent length in a theoretical model of trade and technology transfer. A Northern firm chooses whether to export or produce a new good in a Southern country. In the absence of patent protection, a high tariff is required to induce FDI. This reduces Southern welfare when the good is imported. The Southern government can combine a positive patent length with tariffs to reduce this loss and induce FDI. Thus Southern countries may have an incentive to protect patents, although never to the same extent as Northern countries.

Strategic Intellectual Property Rights Policy and North-South Technology Transfer

This paper analyzes welfare implications of protecting intellectual property rights (IPR) in the framework of TRIPS for developing countries (South) through its impact on innovation, market structure and technology transfer. In a North-South trade environment, the South sets its IPR policy strategically to manipulate multinationals' decisions on innovation and location. Firms can protect their technology by exporting or risk spillovers by undertaking FDI to avoid tariffs. A stringent IPR regime is always optimal for the South as it triggers technology transfer by inducing FDI in less R&D-intensive industries and stimulates innovation by pushing multinationals to deter entry in high-technology sectors.

Technology transfer under the CDM: Materializing the myth in the Japanese context?

The paper investigates the role that the clean development mechanism (CDM) could play in enhancing the effectiveness of north–south technology transfer. This is done by first exploring the issue of technology transfer in the context of existing north–south experiences to bring out the basis for the poor and unsatisfactory performance. This is followed by bringing out the intrinsic relevance of appropriate technology transfer for combating the global climate change issue. The paper then analyses the potential for such an appropriate and sustainable transfer, as well as effective diffusion and deployment of technologies under the CDM. Various aspects of the evolving design of the CDM are investigated to analyze the potential for overcoming the historical barriers across the north–south divide. Any potential for technology transfer under the CDM would need to be supported by an effective framework in the developed countries as well as a conducive environment in developing countries. In searching for such a cooperative and complementary model, the paper analyses the current Dutch strategy to bringforth certain salient features that could be applicable for other countries. Finally, a Japanese model for technology transfer is developed which can build upon domestic strengths as adopt applicable features of the Dutch strategy in order to capitalize any latent potential under the CDM. This is done by first investigating the effectiveness of the existing Japanese technology transfer framework and then extending recommendations for adapting it to reflect the shifting resource flow paradigms under the climate change regime.

Technology transfer under the CDM Materializing the myth in the Japanese context?

The paper investigates the role that the clean development mechanism (CDM) could play in enhancing the effectiveness of north—south technology transfer. This is done by first exploring the issue of technology transfer in the context of existing north—south experiences to bring out the basis for the poor and unsatisfactory performance. This is followed by bringing out the intrinsic relevance of appropriate technology transfer for combating the global climate change issue. The paper then analyses the potential for such an appropriate and sustainable transfer, as well as effective diffusion and deployment of technologies under the CDM. Various aspects of the evolving design of theCDMare investigated to analyze the potential for overcoming the historical barriers across the north—south divide. Any potential for technology transfer under the CDM would need to be supported by an effective framework in the developed countries as well as a conducive environment in developing countries. In searching for such a cooperative and complementary model, the paper analyses the current Dutch strategy to bringforth certain salient features that could be applicable for other countries. Finally, a Japanese model for technology transfer is developed which can build upon domestic strengths as adopt applicable features of the Dutch strategy in order to capitalize any latent potential under the CDM. This is done by first investigating the effectiveness of the existing Japanese technology transfer framework and then extending recommendations for adapting it to reflect the shifting resource flow paradigms under the climate change regime.