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By Mark Casson

"in the postwar global the most position of the multinational company has been the foreign diffusion of propriety know-how and managerial talents"

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Perhaps the most pervasive restrictions relate to exports. 13 shows that in many countries (six out of ten in the table) more than half of all contracts impose export restrictions on the licensor; in Peru, Mexico and Chile more than 90% of all contracts do so. 13. Percentages of contracts containing restrictive export clauses c. 1970 Country Percentage Peru Mexico Chile Bolivia Colombia Ecuador India Philippines Argentina Israel 99 97 93 83 79 75 43 32 28 6 Source: UNCTAD, Major Issues arising from the Transfer of Technology to Developing Countries, New York: United Nations, TD/B/AC.

G- "" ~ ..... :! :! :! ~ "' <:)'1:3 ~ ;§"" ..... :! :! 1:::1 Indonesia Malaysia Thailand Burma Philippines Mexico Brazil Andean Common Market y' y' y' y' y' t ·- y' .... ~ 0 ·-"" ·-..... __ ·- ..... t .... :! <:) ::! , ·- ·-"' '-' ..... :! ~bo .... :! :! :! "' ~ ~:::~·- y' y' y' y' y' y' ..... ;:. ;: y' y' Source: R. D. Robinson, National Control of Foreign Business Entry: A Survey of Fifteen Countries, New York, 1976. 9 EQUITY AND EFFICIENCY Although host countries perceive many problems in their relations with MNEs this does not imply that an international economic order based on the transfer of technology by MNEs should be rejected.

However, there is monopoly power up to the limit-price set by the best alternative technology, and because of competition cross-price elasticities of demand between different users are infinite. To simplify the analysis we assume that the product is sold at a uniform price. Factors governing the optimal royalty system may be analysed as follows. 4(a) the industry demand curve is DD'. Under both old and new technology, production is carried on by a large number of small plants. Initially the industry supply curve is S0 S0 ' and industry output is Z.

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