We examine the determinants and effects of technology acquisition licensing, using
firm-level data between 1957 and 1970. Our results indicate that in technology
acquisition licensing, the government screened a firm's application based on (i) the
industry that the firm belonged to and (ii) its past experience of technology acquisition.
As a result, inefficient firms with considerable experience tended to acquire more
technologies before deregulation. Despite this screening process, the technology
acquisition policy contributes to improve a firm performance: The firms with acquired
technology succeeded in capital accumulation, which results in much faster growth of
labor productivity.
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