Intellectual Property Rights, Imitation, And Foreign Direct Investment: Theory And Evidence
- Topics:
- Foreign Direct Investment
- Tags:
- Business Operations,
- Research & Development,
- Investment,
- Intellectual Property Right,
- Intellectual Property,
- Foreign Direct Investment (FDI),
- Foreign Direct Investment,
- Finance,
- Currency & Foreign Exchange,
- Theory
- Source:
- Columbia University
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Overview: What is the effect of a strengthening of Intellectual Property Rights (IPR) protection by developing countries on local imitation and inflows of Foreign Direct Investment (FDI)? This paper addresses this question both theoretically and empirically. On the theoretical side, a North-South product cycle model is developed in which Northern innovation, Southern imitation, and FDI are all endogenous. This model predicts that IPR reform in the South leads to increased FDI from the North, as Northern firms shift production to Southern affiliates. This results indicate that U.S.-based MNCs expand the scale of their activities in reforming countries after IPR reform, and this effect is disproportionately strong for affiliates whose parents rely strongly on patented intellectual property as part of their global business strategy.
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Format: PDF | Size: 276KB | Date: Apr 2007 | Pages: 44
