Externalities in North-South technology transfer: the case of CNG engines in Iran

This contribution focuses on illuminating the challenges and difficulties of North-South technology transfer. The central message of this paper is that North-South technology transfer is not simply a contract between two transacting firms and does not depend only on intra-firm and inter-firm factors. The process may also be influenced by a number of external factors, beyond the control or power of project managers. However, understanding of these external factors greatly influences the success of firms’ technological development. These externalities could arise from North-South contexts variances, international atmosphere and even by different levels of both sides’ actors involved in the process. Using an in-depth case study analysis for collaboration between Iranian and German companies, this article develops a clearer understanding of external factors which affect the cross-border technology transfer process.