The effects of stronger intellectual property rights on technology transfer: evidence from Japanese firm-level data

Abstract

This paper presents the theoretical framework and empirical analysis of the effect of stronger Intellectual Property Rights (IPRs) on technology transfer from parent firm to its subsidiaries in foreign countries. The results of empirical testing, based on the firm-level panel data of Japanese MNCs’ foreign subsidiaries, show that the stronger protection of IPRs has a positive effect on the promotion of intra-firm technology transfer after controlling for market specific factors in the host countries as well as parent-subsidiary firm specific factors. They are consistent with our theoretical prediction and the results of the previous studies based on US firm-level data.