Showing papers by "David J. Teece published in 1981"

The Market for Know-How and the Efficient International Transfer of Technology

Abstract: This article explores the nature of international technology transfer and the operation of the market for know-how. It begins by examining the relationship between codification and transfer costs and then analyzes various imperfections in the market for know-how. The special properties of know-how are shown to confound various aspects of the exchange process when arms-length contracting is involved. The internalization of the exchange process within multinational firms serves to bypass many of these difficulties, and explains why the multinational firm is of such importance. Several forms of regulation of technology imports and exports are examined. It is discovered that the process is insufficiently well understood to permit the design of effective regulation that, moreover, appears unlikely to eliminate inefficiency. An efficiency focus is maintained throughout since I feel no qualification to pontificate on complex and confused distributional issues.

Internal organization and economic performance: an empirical analysis of the profitability of principal firms*

Abstract: BUSINESS historians have long been aware that organizational innovations have had remarkable productivity ramifications, A. H. Cole has asserted that "if changes in business procedures and practices were patentable, the contributions of business change to the economic growth of the nation would be as widely recognized as the influence of mechanical inventions" [9, pp. 61-62]. Some economists have come to recognize the role of organizational innovation, Kenneth Arrow noting that "Truly among man's innovations, the use of organization to accomplish his ends is among both his greatest and earliest" [2, p. 2441. Oliver Williamson [271 has further championed the study of organizational innovation, doing much to provide the theoretical underpinnings necessary to bring the topic into the corpus of economic theory. Furthermore, Richard Caves has observed that "both corporate strategy and organizational structure influence the economic performance of the firm and the market in which it sells" [6, p. 641. However, structural parameters are absent from the neoclassical theory of production, which masquerades as the economic theory of the firm. Developments in the theory of the firm are unlikely to accommodate organizational structure considerations until connections between structure and performance have been demonstrated empirically. The purpose of this paper is to explore the relationships between a particular kind of decentralized and divisionalized internal hierarchical structure -what Oliver Williamson has called the 'M-Form' innovation [27, Ch. 81-and firm profitability. In essence the methodology involves examining the differential performance between the M-Form 'innovator' in an industry and its principal rival. Application of two non-parametric statistical tests-the Sign Test and the Wilcoxon Matched Pairs Signed Ranks Test-is supportive of the hypothesis that the M-Form structure is associated with superior firm