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Does intellectual property rights reform spur industrial development?

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  • Branstetter, Lee
  • Fisman, Ray
  • Foley, C. Fritz
  • Saggi, Kamal

Abstract

An extensive theoretical literature generates ambiguous predictions concerning the effects of intellectual property rights (IPR) reform on industrial development. The impact depends on whether multinational enterprises (MNEs) expand production in reforming countries and the extent of decline in imitative activity. We examine the responses of U.S.-based MNEs and domestic industrial production to a set of intellectual property rights reforms in the 1980s and 1990s. Following reform, MNEs expand the scale of their activities. MNEs that make extensive use of intellectual property disproportionately increase their use of inputs. There is an overall expansion of industrial activity after reform, and highly disaggregated trade data indicate higher exports of new goods. These results suggest that the expansion of multinational activity more than offsets any decline in imitative activity.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 83 (2011)
Issue (Month): 1 (January)
Pages: 27-36

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Handle: RePEc:eee:inecon:v:83:y:2011:i:1:p:27-36

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Web page: http://www.elsevier.com/locate/inca/505552

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Keywords: Intellectual property rights Multinational enterprises Foreign direct investment Industrial development Production shifting;

References

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  1. Beata K. Smarzynska, 2003. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers through Backward Linkages," William Davidson Institute Working Papers Series 548, William Davidson Institute at the University of Michigan.
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  17. Lee Branstetter & Raymond Fisman & C. Fritz Foley & Kamal Saggi, 2007. "Intellectual Property Rights, Imitation, and Foreign Direct Investment: Theory and Evidence," NBER Working Papers 13033, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Kamal Saggi, 2013. "Market Power in the Global Economy: The Exhaustion and Protection of Intellectual Property," Economic Journal, Royal Economic Society, vol. 123(567), pages 131-161, 03.
  2. Thomas J. Holmes & Ellen R. McGrattan & Edward C. Prescott, 2011. "Technology capital transfer," Working Papers 687, Federal Reserve Bank of Minneapolis.
  3. Thomas J. Holmes & Ellen R. McGrattan & Edward C. Prescott, 2013. "Quid pro quo: Technology capital transfers for market access in China," Staff Report 486, Federal Reserve Bank of Minneapolis.
  4. Maurseth, Per Botolf & Svensson, Roger, 2012. "Micro Evidence on International Patenting," Working Paper Series 934, Research Institute of Industrial Economics.
  5. Keith E. MASKUS & Lei YANG, 2013. "The Impacts of Post-TRIPS Patent Reforms on the Structure of Exports," Discussion papers 13030, Research Institute of Economy, Trade and Industry (RIETI).
  6. Ming Liu & Sumner La Croix, 2014. "The Impact of Stronger Property Rights in Pharmaceuticals on Innovation in Developed and Developing Countries," Working Papers 201407, University of Hawaii at Manoa, Department of Economics.
  7. Nagano, Mamoru, 2013. "Similarities and differences among cross-border M&A and greenfield FDI determinants: Evidence from Asia and Oceania," Emerging Markets Review, Elsevier, vol. 16(C), pages 100-118.
  8. Arghya Ghosh & Jota Ishikawa, 2013. "Trade Liberalization, Absorptive Capacity and the Protection of Intellectual Property Rights," Discussion Papers 2013-11, School of Economics, The University of New South Wales.
  9. Sebastian Benz, 2012. "Trading Tasks: A Dynamic Theory of Offshoring," Ifo Working Paper Series Ifo Working Paper No. 150, Ifo Institute for Economic Research at the University of Munich.
  10. Kamal Saggi & Difei Geng, 2014. "The nature of innovative activity and the protection of intellectual property: a post TRIPS perspective from Asia," Vanderbilt University Department of Economics Working Papers 14-00003, Vanderbilt University Department of Economics.
  11. Sunil Kanwar, 2013. "Innovation, Productivity and IPRs," Working papers 230, Centre for Development Economics, Delhi School of Economics.
  12. Ming Liu & Sumner La Croix, 2014. "A Cross-Country Index of Intellectual Property Rights in Pharmaceutical Innovations," Working Papers 201408, University of Hawaii at Manoa, Department of Economics.
  13. Canals, Claudia & Şener, Fuat, 2014. "Offshoring and intellectual property rights reform," Journal of Development Economics, Elsevier, vol. 108(C), pages 17-31.
  14. Roger Smeets & Albert de Vaal, 2011. "Knowledge diffusion from FDI and Intellectual Property Rights," CPB Discussion Paper 168, CPB Netherlands Bureau for Economic Policy Analysis.
  15. Yang, Zhenzeng, 2013. "Intellectual Property Rights Protection, Complexity and Multinational Firms," MPRA Paper 46734, University Library of Munich, Germany.

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