"Local, Foreign Firms and Supra-National Institutions: The Pace of Intellectual Property Compliance"

Abstract

We investigate the variation in developing countries’ rate of compliance with global intellectual property standards. Using old and new institutionalism perspectives, we present a co-evolutionary process of institutional change in innovation systems of these countries, where local firms, advanced country multinational enterprises (AMNEs) and supra-national institutions had differential effects on the institutional change process, in terms of their rate of increasing their intellectual property protection to the level of the developed countries. We track 60 developing countries (from 1995 to the last date of full compliance in 2005) that became part of the Trade Related Intellectual Property Standards (TRIPS) agreement and find that the pressure of foreign firms in developing countries results in faster TRIPS compliance. This relationship is positively moderated by the existence of their on-going dependency to the supra-national institutions such as the International Monetary Fund (IMF). On the other hand,...