S-Space College of Social Sciences (사회과학대학) Institute of Economics Research (경제연구소) Seoul Journal of Economics Seoul Journal of Economics vol.09(3) (Fall 1996)
Boomerang Effects of Wells Effects?
- Kim, JaiJune
- Issue Date
- Seoul Journal of Economics, Vol.9 No.3, pp. 203-216
- As a home firm licenses technology abroad, foreign companies begin competing against home products. An attempt to enhance revenues by selling knowhow abroad might "boomerang" back to reduce profits. Foreign entry into the final goods industry, however, may stimulate home exports of intermediate goods to the foreign country ("wells effects"). This upstream expansion may partially of more than offset the profit loss in the home downstream industry. Net gains from technology licensing could go in either direction a priori.