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Intellectual property rights, imitation, and development. The effect on cross-border mergers and acquisitions

Author

Listed:
  • Mercedes Campi
  • Marco Dueñas
  • Matteo Barigozzi
  • Giorgio Fagiolo

Abstract

In this paper, we analyze whether the recent global process of strengthening and harmonization of intellectual property rights (IPRs) affects decisions of cross-border mergers and acquisitions (M&As). We investigate if IPRs have a differential effect across sectors of different technology content and for countries of different development level. Also, we study how imitation abilities of target countries interact with the tightening of IPRs. Using data for the post-TRIPS period (1995–2010), we estimate an extended gravity model to study the bilateral number of M&As, including a measure of the strength of IPRs systems on target countries and a set of control variables usually considered as determinants of M&As. The estimation results verify the gravity structure for M&As and show that IPRs –and enforcement– influence decisions of cross-border M&As in all sectors regardless of their technological content. However, IPRs are more important in countries with high imitation abilities and in sectors of high-technology content. Furthermore, a strengthening of IPRs leads to a larger increase of M&As in developing countries than in developed countries. These results call the attention on the possible implications for least developed economies and challenge the adequacy of a globally harmonized IPRs systems.

Suggested Citation

  • Mercedes Campi & Marco Dueñas & Matteo Barigozzi & Giorgio Fagiolo, 2019. "Intellectual property rights, imitation, and development. The effect on cross-border mergers and acquisitions," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 28(2), pages 230-256, February.
    • Handle: RePEc:taf:jitecd:v:28:y:2019:i:2:p:230-256
    DOI: 10.1080/09638199.2018.1518477
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    Cited by:

    1. Mercedes Campi & Alessandro Nuvolari, 2021. "Intellectual Property Rights and Agricultural Development: Evidence from a Worldwide Index of IPRs in Agriculture (1961-2018)," Journal of Development Studies, Taylor & Francis Journals, vol. 57(4), pages 650-668, April.
    2. Yan Yan & Jiatao Li & Jingjing Zhang, 2022. "Protecting intellectual property in foreign subsidiaries: An internal network defense perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(9), pages 1924-1944, December.
    3. Gnangnon, Sèna Kimm, 2023. "Aid for Trade flows, Patent Rights Protection and Total Factor Productivity," EconStor Preprints 274650, ZBW - Leibniz Information Centre for Economics.
    4. Ahmad Arslan & Ofra Bazel-Shoham & Matthew Imes & Sang Mook Lee & Amir Shoham, 2023. "Protectionism and Cross-Border Mergers and Acquisitions Undertaken by US Multinational Enterprises: The Moderating Role of Intellectual Property Rights Protection," Management International Review, Springer, vol. 63(5), pages 697-730, October.
    5. Kaneko, Katsuyuki & Kajikawa, Yuya, 2025. "Quantitative model of firms’ weight using a gravity model in relative coordinates: Case study of photo film industry facing digital innovation," Journal of Informetrics, Elsevier, vol. 19(3).
    6. Sèna Kimm Gnangnon, 2025. "Aid for trade flows and the strength of patent right protection," International Economics and Economic Policy, Springer, vol. 22(2), pages 1-30, May.
    7. Bazel-Shoham, Ofra & Lee, Sang Mook & Ahammad, Mohammad Faisal & Tarba, Shlomo Y. & Alon, Ilan, 2023. "IP protection and ownership in cross-border acquisitions," International Business Review, Elsevier, vol. 32(3).

    More about this item

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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