ABSTRACT
This chapter examines some ways in which the international transfer of technology may be affected by the economic power of the transmitting enterprises. The chapter takes a historical perspective on this issue, and examines power from a strictly microeconomic stance. Power is defined as the economic leverage which firms have over their own (and other firms') behaviour. In neo-classical economics, the source of such discretion is the economic rent earned by firms. Such rent may be derived from the exclusive or privileged possession of an asset or right, or from the governance of a number of separate, but interdependent, activities. When buying inputs and selling outputs in a perfect market, a firm is assumed to have no economic leverage, except over whether or not to produce. In imperfect competition, it is assumed to have more latitude; for example, a single-product monopolist may restrict output below, or raise price above, the competitive level; a horizontally or vertically integrated monopolist may have wider options which stem from the economies of scope and the ability to co-ordinate interrelated valueadding activities (Williamson, 1981).
