Abstract

In many ways, technology policy as a ‘visible hand’ in the technology market often exerts significant economic effects on firms’ investing behaviors regarding research and development (R&D) and technology transaction. In addition, proper management of technology is critical to the foundation of national and organizational competitiveness. With the ongoing rivalry between mainland China and Taiwan, national security is always a significant policy concern for all parties. Technology Protection Act (TPA) has recently been brought about by Taiwan government to better the environment of technology development and strengthen national security. An institutional perspective is taken in this paper in analyzing its potential effects on industry development. As time is one of the essential elements in understanding the characteristics of market development, both technology and industry policy makers need to have in mind the dynamic nature of technology market while crafting the framework of policies. In this paper, efforts have been made to develop an integrative model based on Technology Life Cycle (TLC) and Transaction Cost Economics (TCE) to address its potential impact on the institutional environment and thereby on both demand and supply behavior of technology market participants. Suggestions are formulated for policy makers.

Key words: Technology market, life cycle, transaction cost economics, governance, institutional theory.