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FDI spillovers and Intellectual Property Rights

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  • Kiyoshi Matsubara

Abstract

This paper extends the Symeonidis's (2003) oligopoly model to discuss how FDI spillovers that decrease the quality difference between vertically differentiated products of home and foreign firms affect the home firm's decision on plant location. This paper shows that whether the degree of spillover is exogenous or endogenous, it may have a positive relationship with a unit trade cost. It also shows that in an oligopoly model with two home firms, FDI is more likely than in a duopoly case. The hypothesis in the duopoly model is supported by the cross-country regression over 41 for developing/emerging economies.

Suggested Citation

  • Kiyoshi Matsubara, 2012. "FDI spillovers and Intellectual Property Rights," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 5(1), pages 57-67.
    • Handle: RePEc:ids:ijtrgm:v:5:y:2012:i:1:p:57-67
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    References listed on IDEAS

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    1. Brian J. Aitken & Ann E. Harrison, 2022. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 6, pages 139-152, World Scientific Publishing Co. Pte. Ltd..
    2. Hodaka Morita & Xuan Nguyen, 2012. "FDI and Technology Spillovers under Vertical Product Di erentiation," Discussion Papers 2012-19, School of Economics, The University of New South Wales.
    3. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    4. Aitken, Brian & Harrison, Ann & DEC, 1994. "Do domestic firms benefit from foreign direct investment? Evidence from panel data," Policy Research Working Paper Series 1248, The World Bank.
    5. Symeonidis, George, 2003. "Comparing Cournot and Bertrand equilibria in a differentiated duopoly with product R&D," International Journal of Industrial Organization, Elsevier, vol. 21(1), pages 39-55, January.
    6. Blomstrom, Magnus & Kokko, Ari, 1998. "Multinational Corporations and Spillovers," Journal of Economic Surveys, Wiley Blackwell, vol. 12(3), pages 247-277, July.
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    Cited by:

    1. Morita, Hodaka & Nguyen, Xuan, 2021. "FDI and quality-enhancing technology spillovers," International Journal of Industrial Organization, Elsevier, vol. 79(C).

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