A Study of International Technical Cooperation in Response to Changes in Market Scale

• Main Authors: Lin, You Rong, 林侑蓉
• Other Authors: 謝登隆
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/12300679678579029656

碩士 === 東海大學 === 國際貿易學系 === 100 === After the U.S. financial crisis in 2008, the European debt crisis in 2010, the gap of market scale between advanced and emerging countries has become narrower. Companies in Taiwan often adopt the technical cooperation strategy with foreign firm in order to strengthen the multi-national competitiveness since the domestic market of Taiwan is small and the R&D capability is weak. In this study, we analyze the economic effects in response to contraction of market size between advanced and emerging countries when firms adopt the international technical cooperation strategy. This paper is based on the following three literatures, Chrysovalantou Milliou (2004), Buehler, & Schmeltzer (2008) and Luis Santos-Pinto (2010). In this research, we assume that there exist two competing markets and one firm in each market. The firm in the larger market (e.g. Japan) enjoys the advantage of domestic monopoly. Moreover, the smaller market, such as Taiwan, is neglected due to the insignificant domestic market size. We also assume that the two firms are oligopolistic competing in the largest market (e.g. Europe or America). We observe the following economic effects when the gap of the market scale of the two competing firms becomes smaller and both firms adopt technical cooperation strategy:(1) Profit of technical cooperating firms is reduced. (2) The extent of reduced profit of the firm in the larger market is greater than that of the firm in the smaller market. (3) The price of key components falls. In other words, the profit of upstream suppliers is damaged. (4) The equilibrium production level of the overall market declines. (5) The equilibrium price of the overall market rises. (6) The research and development cost of the technical cooperating firms is reduced. key words: international technical cooperation, differences in the size of the market, research and development costs