IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

The impact of the institution of patent protection and enforcement on entry mode strategy: A panel data investigation of U.S. firms

  • Papageorgiadis, Nikolaos
  • Cross, Adam R.
  • Alexiou, Constantinos

The Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement has engendered a harmonisation of patent laws across countries but the extent of enforcement of these laws continues to vary. This study investigates the degree to which de jure book law protection of patents and de facto enforcement of these laws influences the propensity of firms to exploit their patented technology in foreign markets with company-owned operations or unrelated concerns using licensing agreements. Analyzing data on royalty and fee receipts of U.S. parent companies from affiliates and non-affiliated parties abroad from 1998 to 2007, and using separate measures for de jure and de facto patent protection and enforcement, we find that strengthening de jure protection induces greater affiliate licensing while strengthening de facto enforcement induces non-affiliate licensing. We conclude by observing that greater account should be taken of de facto enforcement measures when investigating the role of institutions on the international activities of firms.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/pii/S0969593112000510
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal International Business Review.

Volume (Year): 22 (2013)
Issue (Month): 1 ()
Pages: 278-292

as
in new window

Handle: RePEc:eee:iburev:v:22:y:2013:i:1:p:278-292
Contact details of provider: Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/description#description

Order Information: Postal: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/bibliographic
Web: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/bibliographic

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Michael W Nicholson, 2007. "The Impact of Industry Characteristics and IPR Policy on Foreign Direct Investment," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 143(1), pages 27-54, April.
  2. Lee G Branstetter & Raymond Fisman & C. Fritz Foley, 2006. "Do Stronger Intellectual Property Rights Increase International Technology Transfer? Empirical Evidence from U. S. Firm-Level Panel Data," The Quarterly Journal of Economics, MIT Press, vol. 121(1), pages 321-349, 02.
  3. Park, Walter G., 2008. "International patent protection: 1960-2005," Research Policy, Elsevier, vol. 37(4), pages 761-766, May.
  4. Donnelly, William A. & Manifold, Diane, 2005. "A Compilation of Reported Non-Tariff Measures: Description of the Information," Working Papers 15869, United States International Trade Commission, Office of Economics.
  5. Ryuhei Wakasugi & Banri Ito, 2009. "The effects of stronger intellectual property rights on technology transfer: evidence from Japanese firm-level data," The Journal of Technology Transfer, Springer, vol. 34(2), pages 145-158, April.
  6. Paul Brenton & Francesca Di Mauro & Matthias Lücke, 1999. "Economic Integration and FDI: An Empirical Analysis of Foreign Investment in the EU and in Central and Eastern Europe," Empirica, Springer, vol. 26(2), pages 95-121, June.
  7. Hayo, Bernd & Voigt, Stefan, 2007. "Explaining de facto judicial independence," International Review of Law and Economics, Elsevier, vol. 27(3), pages 269-290, September.
  8. Smith, Pamela J., 2001. "How do foreign patent rights affect U.S. exports, affiliate sales, and licenses?," Journal of International Economics, Elsevier, vol. 55(2), pages 411-439, December.
  9. Sumner J. La Croix & Denise Eby Konan, 2002. "Intellectual Property Rights in China: The Changing Political Economy of Chinese-American Interests," The World Economy, Wiley Blackwell, vol. 25(6), pages 759-788, 06.
  10. Erin Anderson & Hubert Gatignon, 1986. "Modes of Foreign Entry: A Transaction Cost Analysis and Propositions," Journal of International Business Studies, Palgrave Macmillan, vol. 17(3), pages 1-26, September.
  11. Ashish Arora & Andrea Fosfuri, 2000. "Wholly Owned Subsidiary Versus Technology Licensing in the Worldwide Chemical Industry," Journal of International Business Studies, Palgrave Macmillan, vol. 31(4), pages 555-572, December.
  12. Fosfuri, Andrea, 2004. "Determinants of international activity: evidence from the chemical processing industry," Research Policy, Elsevier, vol. 33(10), pages 1599-1614, December.
  13. Rod Falvey & Neil Foster & David Greenaway, 2006. "Intellectual Property Rights and Economic Growth," Review of Development Economics, Wiley Blackwell, vol. 10(4), pages 700-719, November.
  14. Michael Ferrantino, 1993. "The effect of intellectual property rights on international trade and investment," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 129(2), pages 300-331, June.
  15. Nunnenkamp, Peter & Spatz, Julius, 2002. "Determinants of FDI in Developing Countries: Has Globalization Changed the Rules of the Game?," Open Access Publications from Kiel Institute for the World Economy 2976, Kiel Institute for the World Economy (IfW).
  16. John Hagedoorn & Danielle Cloodt & Hans van Kranenburg, 2005. "Intellectual property rights and the governance of international R&D partnerships," Journal of International Business Studies, Palgrave Macmillan, vol. 36(2), pages 175-186, March.
  17. Bruce Kogut & Harbir Singh, 1988. "The Effect of National Culture on the Choice of Entry Mode," Journal of International Business Studies, Palgrave Macmillan, vol. 19(3), pages 411-432, September.
  18. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
  19. Jayashree Watal, 2000. "Pharmaceutical Patents, Prices and Welfare Losses: Policy Options for India Under the WTO TRIPS Agreement," The World Economy, Wiley Blackwell, vol. 23(5), pages 733-752, 05.
  20. Clegg, Jeremy & Cross, Adam R., 2000. "Affiliate and non-affiliate intellectual property transactions in international business: an empirical overview of the UK and USA," International Business Review, Elsevier, vol. 9(4), pages 407-430, August.
  21. Horstmann, Ignatius J & Markusen, James R, 1987. "Strategic Investments and the Development of Multinationals," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 28(1), pages 109-21, February.
  22. W. J. Henisz, 2000. "The Institutional Environment for Economic Growth," Economics and Politics, Wiley Blackwell, vol. 12(1), pages 1-31, 03.
  23. Maskus, Keith E. & Penubarti, Mohan, 1995. "How trade-related are intellectual property rights?," Journal of International Economics, Elsevier, vol. 39(3-4), pages 227-248, November.
  24. Robert L Ostergard, 2000. "The Measurement of Intellectual Property Rights Protection," Journal of International Business Studies, Palgrave Macmillan, vol. 31(2), pages 349-360, June.
  25. Guifang Yang & Keith Maskus, 2001. "Intellectual property rights and licensing: An econometric investigation," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 137(1), pages 58-79, March.
  26. Feld, Lars P. & Voigt, Stefan, 2003. "Economic growth and judicial independence: cross-country evidence using a new set of indicators," European Journal of Political Economy, Elsevier, vol. 19(3), pages 497-527, September.
  27. Seno-Alday, Sandra, 2010. "International business thought: A 50-year footprint," Journal of International Management, Elsevier, vol. 16(1), pages 16-31, March.
  28. Arai, Hisamitsu, 2006. "Japan's intellectual property strategy," World Patent Information, Elsevier, vol. 28(4), pages 323-326, December.
  29. Keith D Brouthers & Lance Eliot Brouthers, 2001. "Explaining the National Cultural Distance Paradox," Journal of International Business Studies, Palgrave Macmillan, vol. 32(1), pages 177-189, March.
  30. Klaus E Meyer, 2001. "Institutions, Transaction Costs, and Entry Mode Choice in Eastern Europe," Journal of International Business Studies, Palgrave Macmillan, vol. 32(2), pages 357-367, June.
  31. Mike W Peng, 2004. "Identifying the big question in international business research," Journal of International Business Studies, Palgrave Macmillan, vol. 35(2), pages 99-108, March.
  32. C.L. Hung, 2003. "The business of product counterfeiting in China and the post-WTO membership environment," Asia Pacific Business Review, Taylor & Francis Journals, vol. 10(1), pages 58-77, October.
  33. Bengoa, Marta & Sanchez-Robles, Blanca, 2003. "Foreign direct investment, economic freedom and growth: new evidence from Latin America," European Journal of Political Economy, Elsevier, vol. 19(3), pages 529-545, September.
  34. Moulton, Brent R, 1987. "Diagnostics for Group Effects in Regression Analysis," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(2), pages 275-82, April.
  35. Teece, David J., 1993. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," Research Policy, Elsevier, vol. 22(2), pages 112-113, April.
  36. Keith E. Maskus, 2000. "Intellectual Property Rights in the Global Economy," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 99.
  37. Drogendijk, Rian & Slangen, Arjen, 2006. "Hofstede, Schwartz, or managerial perceptions? The effects of different cultural distance measures on establishment mode choices by multinational enterprises," International Business Review, Elsevier, vol. 15(4), pages 361-380, August.
  38. Peter J Buckley & L Jeremy Clegg & Adam R Cross & Xin Liu & Hinrich Voss & Ping Zheng, 2007. "The determinants of Chinese outward foreign direct investment," Journal of International Business Studies, Palgrave Macmillan, vol. 38(4), pages 499-518, July.
  39. Gould, David M. & Gruben, William C., 1996. "The role of intellectual property rights in economic growth," Journal of Development Economics, Elsevier, vol. 48(2), pages 323-350, March.
  40. John H Dunning, 1988. "The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions," Journal of International Business Studies, Palgrave Macmillan, vol. 19(1), pages 1-31, March.
  41. Stein, Ernesto & Daude, Christian, 2007. "Longitude matters: Time zones and the location of foreign direct investment," Journal of International Economics, Elsevier, vol. 71(1), pages 96-112, March.
  42. Ginarte, Juan C. & Park, Walter G., 1997. "Determinants of patent rights: A cross-national study," Research Policy, Elsevier, vol. 26(3), pages 283-301, October.
  43. Maskus, Keith E, 1998. "Strengthening Intellectual Property Rights in Asia: Implications for Australia," Australian Economic Papers, Wiley Blackwell, vol. 37(3), pages 346-61, September.
  44. Beugelsdijk, S. & Hennart, J.M.A. & Slangen, A.H.L. & Smeets, R., 2010. "Why and how FDI stocks are a biased measure of MNE affiliate activity," Other publications TiSEM 48b61eb8-c39a-4565-8b10-e, Tilburg University, School of Economics and Management.
  45. Brent B Allred & Walter G Park, 2007. "Patent rights and innovative activity: evidence from national and firm-level data," Journal of International Business Studies, Palgrave Macmillan, vol. 38(6), pages 878-900, November.
  46. Glass, Amy Jocelyn & Wu, Xiaodong, 2007. "Intellectual property rights and quality improvement," Journal of Development Economics, Elsevier, vol. 82(2), pages 393-415, March.
  47. Oxley, Joanne E., 1999. "Institutional environment and the mechanisms of governance: the impact of intellectual property protection on the structure of inter-firm alliances," Journal of Economic Behavior & Organization, Elsevier, vol. 38(3), pages 283-309, March.
  48. Chakrabarti, Avik, 2001. "The Determinants of Foreign Direct Investment: Sensitivity Analyses of Cross-Country Regressions," Kyklos, Wiley Blackwell, vol. 54(1), pages 89-113.
  49. Kimberly A. Clausing & Cosmina L. Dorobantu, 2005. "Re-entering Europe: Does European Union candidacy boost foreign direct investment?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(1), pages 77-103, 01.
  50. Ivus, Olena, 2010. "Do stronger patent rights raise high-tech exports to the developing world?," Journal of International Economics, Elsevier, vol. 81(1), pages 38-47, May.
  51. Tarun Khanna & Joe Kogan & Krishna Palepu, 2006. "Globalization and Similarities in Corporate Governance: A Cross-Country Analysis," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 69-90, February.
  52. Walter G. Park & Douglas C. Lippoldt, 2004. "International Licensing and the Strengthening of Intellectual Property Rights in Developing Countries," OECD Trade Policy Papers 10, OECD Publishing.
  53. Etienne Pfister & Bruno Deffains, 2005. "Patent Protection, Strategic FDI and Location Choices: Empirical Evidence from French Subsidiaries' Location Choices in Emerging Economies," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 12(3), pages 329-346.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:iburev:v:22:y:2013:i:1:p:278-292. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.