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Intellectual Property Rights, Foreign Direct Investment And Industrial Development

In: Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy

Author

Listed:
  • Lee Branstetter
  • Kamal Saggi

Abstract

This article develops a North–South product cycle model in which innovation, imitation and the flow of foreign direct investment (FDI) are all endogenously determined. In the model, a strengthening of intellectual property right (IPR) protection in the South reduces the rate of imitation and it increases the flow of FDI. Indeed, the increase in FDI more than offsets the decline in the extent of production undertaken by Southern imitators so that the South’s share of the global basket of goods increases. Furthermore, while multinationals charge higher prices than Southern imitators, real wages of Southern workers increase while those of Northern workers fall.

Suggested Citation

  • Lee Branstetter & Kamal Saggi, 2023. "Intellectual Property Rights, Foreign Direct Investment And Industrial Development," World Scientific Book Chapters, in: Kamal Saggi (ed.), Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy, chapter 12, pages 275-305, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789813233027_0012
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    More about this item

    Keywords

    International Technology Transfer; Multinational Firms; Trips; Foreign Direct Investment; Oligopolistic Competition; Vertical Contracts; Intellectual Property Rights;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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