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Intellectual Property Rights and Entry into a Foreign Market: FDI vs. Joint Ventures

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  • Alireza Naghavi

    (Università di Modena e Reggio Emilia)

  • Dermot Leahy

    (University College Dublin)

Abstract

We study the effect of the intellectual property rights (IPR) regime of a host country (South) on a multinational's decision between serving a market via greenfield foreign direct investment to avoid the exposure of its technology or entering a joint venture (JV) with a local firm, which allows R&D spillovers under imperfect IPRs. JV is the equilibrium market structure when R&D intensity is moderate and IPRs strong. The South can gain from increased IPR protection by encouraging a JV, whereas policies to limit foreign ownership in a JV gain importance in technology intensive industries as complementary policies to strong IPRs.

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Bibliographic Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2006.97.

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Date of creation: Jun 2006
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Handle: RePEc:fem:femwpa:2006.97

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Keywords: Joint Ventures; Intellectual Property Rights; Technology Transfer; R&D Spillovers; FDI Policy;

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  1. Neary, J Peter, 1998. "Beat 'Em or Join 'Em?: Export Subsidies Versus International Research Joint Ventures in Oligopolistic Markets," CEPR Discussion Papers 1916, C.E.P.R. Discussion Papers.
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  3. Saggi, Kamal, 1996. "Entry into a Foreign Market: Foreign Direct Investment versus Licensing," Review of International Economics, Wiley Blackwell, vol. 4(1), pages 99-104, February.
  4. Alireza Naghavi, 2007. "Strategic Intellectual Property Rights Policy and North-South Technology Transfer," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 143(1), pages 55-78, April.
  5. Mattoo, Aaditya & Olarreaga, Marcelo & Saggi, Kamal, 2001. "Mode of Foreign Entry, Technology Transfer, and FDI Policy," CEPR Discussion Papers 2870, C.E.P.R. Discussion Papers.
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  15. Zigic, Kresimir, 1998. "Intellectual property rights violations and spillovers in North-South trade," European Economic Review, Elsevier, vol. 42(9), pages 1779-1799, November.
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  17. J Peter Neary; & Paul O'Sullivan, 1997. "Beat 'em or Join 'em?: Export Subsidies Versus International Research Joint Ventures in Oligopolistic Markets," Economics, Finance and Accounting Department Working Paper Series n700897, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
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Cited by:
  1. A. Naghavi & Y. Tsai, 2012. "Cross-border intellectual property rights: contract enforcement and absorptive capacity," Working Papers wp809, Dipartimento Scienze Economiche, Universita' di Bologna.
  2. Alireza Naghavi, 2007. "Strategic Intellectual Property Rights Policy and North-South Technology Transfer," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 143(1), pages 55-78, April.

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