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Time-Cost Tradeoffs: Elasticity Estimates and Determinants for International Technology Transfer Projectsby: David Teece
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AbstractThis paper postulates and tests for a time-cost tradeoff during the establishment of manufacturing plants abroad based on U.S. technology. Data on twenty international projects are used to estimate negatively sloped tradeoff functions for which time-cost elasticities are subsequently calculated. The determinants of these elasticities are then analyzed and shown to bear some similarities with the determinants of time-cost tradeoffs in technological innovation. The elasticity measurements were higher for projects where the technology had not been previously commercialized, for large-scale projects, and for projects carried out by the larger firms.
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