Degree Of Intellectual Property Rights Protection Research Articles

Intellectual property rights protection and export product quality: Evidence from China

Intellectual property rights protection (IPP) at destination countries is an important determinant of exports, a result shown by the existing literature. This paper empirically examines the effect of the degree of IPP on export product quality at the origins, using firm-product level data from Chinese exporters and city-level statistics of IPP. To establish the causal relationship, we employ an instrumental variable (IV) approach. Our panel regression results from 2008 to 2013 show that the de facto IPP contributes to the export product quality upgrading and the result is robust against variations of IPP measures, IVs, and different combinations of control variables such as the firm and industry level subsidies. Our heterogeneity results indicate that the betterment of IPP favors less capital-intensive firms; foreign-owned firms relative to domestic-owned firms; and firms in innovation-intensive industries. The effect of IPP on export product quality is statistically insignificant in certain geographic regions (i.e., central and western regions) and trade mode (i.e., processing trade). In addition, we show that the channels through which IPP takes effect on product quality include strengthened R&D input, new product development, and mitigated financial constraints.

Patent protection, innovation, and technology transfer in a Schumpeterian economy

Abstract This paper analyzes the cross-country effects of intellectual property rights (IPR) protection on the relative wage, innovation, and technology transfer in a North-South quality-ladder model with innovative Northern R&D and adaptive Southern R&D. The degree of IPR protection in two countries differs in terms of patent breadth, which determines the markups of Northern firms and their Southern affiliates, respectively. In this model, stronger IPR protection in the South leads to a permanent decrease in the North-South wage gap, a temporary increase in the Northern innovation rate, and a permanent increase in technology transfer. By contrast, stronger IPR protection in the North leads to a permanent increase in the North-South wage gap, ambiguous effects on the Northern innovation rate, and a permanent decrease in technology transfer. Finally, we perform a quantitative analysis by calibrating the model to the US-China data, and the numerical results support these policy implications in addition to a welfare implication such that strengthening patent protection in one country leads to sizable welfare improvements in both countries.

FDI, IPR protection and export quality: an empirical analysis based on national data

PurposeWith the focus on the impact of foreign direct investment (FDI) on export quality or of intellectual property rights (IPR) protection on export trade, there is little scholarly attention on how IPR protection affects the relationship between FDI and export quality. This study aims to examine the potential nonlinear dynamic threshold effect of IPR protection on the relationship between FDI and export quality. Distinguishing between developing and developed countries, the authors present an empirical analysis of the effects of FDI on export quality per degree of IPR protection.Design/methodology/approachUsing panel data on 45 countries for the period from 1992 to 2014, we use a nonlinear dynamic panel threshold model to examine the effect of IPR protection on the relationship between FDI and export quality.FindingsThe authors find a triple threshold effect of IPR protection in both developing and developed countries. The three threshold values are larger for developed countries than for developing countries. The coefficients on the relationship between FDI and export quality per degree of IPR protection are larger in developing countries than in developed countries, except for high IPR protection. The results of the paper suggest that the effect of FDI on export quality differs greatly per degree of IPR protection. In both developing and developed countries, FDI impacts export quality most significantly under medium-high IPR protection. Having estimated the optimal range of IPR protection for attaining FDI in both groups of countries, policy recommendations are offered.Originality/valueThese findings not only contribute to the literature but also provide a view that a moderate level of IPR protection is conducive to attracting FDI and improving export quality.

Trade liberalization, absorptive capacity and the protection of intellectual property rights

AbstractWe examine how trade liberalization affects South's incentive to protect intellectual property rights (IPR) in a North–South duopoly model where a low‐cost North firm competes with a high‐cost South firm in the South market. The North firm serves the South market through either exports or foreign direct investment (FDI). The extent of effective cost difference between North and South depends on South's imitation, which in turn depends on South's IPR protection and absorptive capacity and North firm's location choice, all of which are endogenously determined in our model. For a given level of IPR protection, South's absorptive capacity under exports may be greater than under FDI. Even though innovation is exogenous to the model (and hence unaffected by South's IPR policy), strengthening IPR protection in South can improve its welfare. The relationship between trade costs and the degree of IPR protection that maximizes South welfare is non‐monotone. In particular, South has an incentive to protect IPR only when trade costs are moderate. When masking technology or licensing is incorporated into the model, however, some protection of IPR may be optimal for South even if the trade costs are not moderate.

Does stronger intellectual property rights protection matter in developing local R&D outsourcing strategy?

This study examines whether the intellectual property rights (IPR) protection in the host countries has a significant moderating effect on the relationship between local R&D outsourcing strategy and subsidiary productivity. Due to the subsidiary mandate in the host country being categorized as exploitation-orientation or exploration-orientation, we further examine whether there is a different moderating effect for different types of a subsidiary mandate. This analysis takes advantage of the data-set on Taiwan-based subsidiaries and the IPR indices by the World Economic Forum over the 2006–2009 period. The empirical results show that a stronger degree of IPR protection is, on average, found to play a significant moderating role in the influence of R&D outsourcing strategy based on local collaboration relationships. Interestingly, the moderating effects are found to differ between exploitation-orientation and exploration-orientation.

How Intellectual Property Rights, Licensing and Foreign Direct Investments Shape the Technology Transfer Landscape in Small Developing Countries? Case Study of the Republic of Macedonia

In the last twenty years, many developing countries have undertaken serious reforms of their intellectual property rights (IPR) systems in terms of strengthening of their protection and regulating for more efficient enforcement. This process has been stimulated by numerous multilateral, regional and bilateral agreements, such as the TRIPS (Agreement on trade related aspects of intellectual property), the NAFTA (North American Free Trade Agreement), and a series of Partnership Agreements negotiated and concluded between the European Union and certain developing countries from Europe and the Middle East. In today’s globalized society, knowledge and information are at the core of the growth agenda, and are increasingly essential for gaining and maintaining competitive edge. It seems that the economic and political globalization have deepened the gap between the rich nations and the poor even more, contributing to the imbalanced distribution of material wealth and knowledge, where most of the intangible resources, protected by intellectual property rights (IPRs), are created and kept in developed nations. IPRs can be defined as monopoly rights given by the society for a limited period of time as a reward for creativity and innovativeness. Even though they are intended to promote scientific and social progress, in the case of small, landlocked developing countries they might act as inhibitor to knowledge and technology absorption and diffusion. It is beyond the scope of this paper to consider each of these issues in detail and their multifaceted interrelationships. Rather, this paper aims to contribute to the academic discussion on the impact of the degree of IPR protection on the intensity of technology transfer transactions through licensing and foreign direct investments (FDI) in small developing countries, by taking the example of the Republic of Macedonia.

Trade Liberalization, Absorptive Capacity and the Protection of Intellectual Property Rights

We examine how trade liberalization affects South's incentive to protect intellectual property rights (IPR) in a North-South duopoly model where a low-cost North firm competes with a high-cost South firm in the South market. The extent of effective cost difference between North and South depends on South's imitation, which in turn depends on South's IPR protection and absorptive capacity and North firm's location choice and masking effort, all of which are endogenously determined in our model. Even though innovation is exogenous to the model (and hence unaffected by South's IPR policy) we find that strengthening IPR protection in South can improve its welfare. The relationship between trade cost and the degree of IPR protection that maximizes South welfare is non-monotone. South does not have any incentive to protect IPR when trade costs are either zero or prohibitive, while for moderate values of trade cost, South government can strengthen IPR protection, induce FDI and increase South's welfare. In an extension of the model, where North firm can mask its technology, we show that, even when trade costs are zero or prohibitive, strengthening IPR protection can improve South's welfare by deterring the North firm from masking its technology. The relationships between location choice/masking decision and South's investment in absorptive capacity are also explored.

Accommodation or deterrence in the face of commercial piracy: the impact of intellectual property rights protection

In this paper, we study when the original product developer makes costly investment to deter a commercial pirate in a given regime of intellectual property rights (IPR) protection. We find that when the consumers' tastes are sufficiently diverse and the IPR protection is weak, it is profitable for the original producer to accommodate the pirate. In all other cases, it is profitable to deter. In the comparative statics analysis, we find a non-monotonic relationship between the optimal level of deterrence and the degree of IPR protection in the economy. We also find interesting relationships between the rate of piracy and other parameters like the strength of IPR protection, consumers' tastes, and quality of the pirated product. We find that from the commercial pirate's point of view, the most profitable way to survive in the market is to produce a pirated product of moderate quality. Copyright 2012 Oxford University Press 2011 All rights reserved, Oxford University Press.

Overseas R&D activities and intellectual property rights – a longitudinal study of multinational enterprises in emerging economies

The purpose of this paper is to examine the influence of intellectual property rights (IPRs) protection on the overseas R&D activities of multinational enterprises (MNEs) in emerging economies and to determine whether the influence differs among the various host countries. To provide further empirical evidence, this analysis takes advantage of the longitudinal dataset and IPRs indices developed by the World Economic Forum (WEF) over the 2002–2006 period. The empirical results show that the IPRs protection in the host countries has a significant influence on the overseas R&D activities of MNEs in emerging economies. Interestingly, the influence of IPRs protection is found to differ significantly between developing and developed countries. A stronger degree of IPRs protection in developing countries is found to result in more overseas R&D activities, while a stronger degree of IPRs protection in developed countries, particularly in industrialised countries, tends to reduce the overseas R&D activities of MNEs in emerging economies. In addition, the degree of IPRs protection in host countries is found to play a significant role in moderating overseas R&D activities.

Distance to frontier, intellectual property rights, and economic growth

This article examines the effects of intellectual property rights (IPR) protection on growth and convergence. Firms in a country undertake both innovation and imitation to improve their productivity. IPR protection reduces the cost of innovation, but makes imitation more costly. Countries at early stages of growth adopt a strategy of high effort on imitation, and switch to the strategy of high effort on innovation at some point. A higher degree of IPR protection makes the switch to the strategy of high effort on innovation earlier. There are two possible growth traps. A middle-income trap arises when a country fails to switch to high effort on innovation due to a low degree of IPR protection. Whereas a poverty trap may exist at the early stage of development, when there is no enough effort on imitation due to a strict IPR protection.