model starting out with foreign technological assets, or whether the actual formation of the model derives from the terms under whiCh the technology was bought. This ~uestlon Is analysed on the basis of the clauses Incorporated Into the licensing agreements.(14) 14. In this section, technology contracts drawn up by local firms and also by foreign subsidiaries have been considered· 13 By analysing the clauses defined In technology contracts. It Is easy to establIsh that transnational corporations or the licence-purchaser have foreseen that a licence-holder may launch Innovations based on the technology he receives. There Is Implicit agreement that while the techniques are being used the licensee has an underlying potential for Innovation and after a certaIn per I od may operate I ndependent.J y of the II censor. The restrictive clauses themselves Incorporate this possibility. since we find examples where the ownership of knowledge generated Is made explicit. The restrictions are very significant and can be arranged In four groups: t. Restrictions on the firm's continuing In the market; 2. Restrictions on the posslbl I tty of carrying out improvements; (or restrictions on the rate of local Innovations) 3. Restrictions techniques. on the local appropriation of the new 4. Restrictions on· staff divulging the technology to other staff within the recipient firm <or to third parties). The first type of restriction shows what Is probably the essential characteristic of licensing agreements: technological assets are almost always transferred In a temporary way and under hiring contracts. That Is, the I lcensee does not acquire ownership of the technology -this continues to belong to the tlra granting the licence. The actual texts of the contracts are very explicit and specify that: • (the licensee) (15) Is granted no property rights. as the rights are only licensed and cease when the agreement ends"(16) 
**Analysis**
The text appears to be discussing the terms and conditions of licensing agreements between transnational corporations and local firms, focusing on the restrictions and limitations imposed on the licensee. It seems to be exploring the implications of these agreements on the innovation and technological development of the recipient firm.

**Category**
Industry, Science and Technology