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


  • Dermot Leahy
  • Alireza Naghavi


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 a North-South 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 because it encourages a JV, whereas policies to limit foreign ownership in a JV gain importance in technology-intensive industries as complementary policies to strong IPRs. Copyright © 2010 Blackwell Publishing Ltd.

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  • Dermot Leahy & Alireza Naghavi, 2010. "Intellectual Property Rights and Entry into a Foreign Market: FDI versus Joint Ventures," Review of International Economics, Wiley Blackwell, vol. 18(4), pages 633-649, September.
  • Handle: RePEc:bla:reviec:v:18:y:2010:i:4:p:633-649

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    References listed on IDEAS

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    Cited by:

    1. Ramin Dadasov & Oliver Lorz, 2013. "Mode of International Investment and Endogenous Risk of Expropriation," Review of International Economics, Wiley Blackwell, vol. 21(5), pages 974-983, November.
    2. Po-Lu Chen, 2013. "Modes of Foreign Direct Investment and Intellectual Property Rights Protection: Wholly-owned or Joint Venture? Firm-level Evidence from Taiwanese Multinational Manufacturing Enterprises," Review of International Economics, Wiley Blackwell, vol. 21(3), pages 549-561, August.
    3. repec:kap:jincot:v:17:y:2017:i:4:d:10.1007_s10842-016-0241-0 is not listed on IDEAS

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