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Patent Regimes, Host Country Policies, and the Nature of MNE Activities

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  • Usha Nair‐Reichert
  • Roderick Duncan

Abstract

This paper provides useful insights in the debate regarding the relationship between stronger patent rights, host country policies and multinational activity using panel data from US MNEs. It analyzes the impact of stronger patent protection on the exports, local affiliate sales and licensing activities by explicitly modeling the joint nature of the MNE's decision‐making process in servicing a foreign market. The key findings support the idea that the policy environment in the host country influences the impact of stronger IPRs on US MNE activities during the period 1992 to 2000. A risky environment in the host country appears, on average, to have a negative and significant impact on unaffiliated exports and affiliate sales. Increased patent protection in high‐risk countries, on average, appears to reduce licensing, and increase unaffiliated exports, suggesting a dominant monopoly effect of stronger IPRs in the former case and a dominant market expansion effect in the latter case.

Suggested Citation

  • Usha Nair‐Reichert & Roderick Duncan, 2008. "Patent Regimes, Host Country Policies, and the Nature of MNE Activities," Review of International Economics, Wiley Blackwell, vol. 16(4), pages 783-797, September.
    • Handle: RePEc:bla:reviec:v:16:y:2008:i:4:p:783-797
    DOI: 10.1111/j.1467-9396.2008.00775.x
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    References listed on IDEAS

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    Cited by:

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    2. Daniel Nepelski & Giuditta De Prato, 2012. "Does the Patent Cooperation Treaty work? A global analysis of patent applications by non-residents," JRC Research Reports JRC79541, Joint Research Centre, revised Nov 2012.
    3. Azevedo, Mónica L. & Afonso, Óscar & Silva, Sandra T., 2014. "Endogenous growth and intellectual property rights: A north–south modeling proposal," Economic Modelling, Elsevier, vol. 38(C), pages 112-120.
    4. 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.

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