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Protection of Intellectual Property Rights and Subsidy Policy for Foreign Direct Investment

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  • Kang , Moonsung

    (Korea University)

Abstract

This paper provides a theoretical setup for an analysis of strategic relationships inherent to activities of an innovative multinational enterprise (MNE) and a local company in a host country. Additionally, we explore the incentives of the host country's government to provide subsidies to attract foreign direct investment (FDI) and to protect outcomes of R&D activities conducted by the MNE. We show that the MNE's commercial interests may collide with local companies’ over protection of IPRs. Therefore, the extent of knowledge spillovers from the MNE to the local company and the magnitude of incentives to the MNE perform a crucial function in determining the optimal policy mix of IPR protection and FDI subsidies of the host country's government.

Suggested Citation

  • Kang , Moonsung, 2012. "Protection of Intellectual Property Rights and Subsidy Policy for Foreign Direct Investment," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 16(2), pages 139-154, June.
    • Handle: RePEc:ris:eaerev:0074
    DOI: 10.11644/KIEP.JEAI.2012.16.2.246
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    More about this item

    Keywords

    Foreign Direct Investment; Multinational Enterprises; Strategic Investment Policy; Knowledge Spillovers; Intellectual Property Rights;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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