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Intellectual property rights, product complexity and the organization of multinational firms

Author

Listed:
  • Alireza Naghavi

    (UNIBO - Università di Bologna [Bologna])

  • Julia Spies

    (International Trade Centre)

  • Farid Toubal

    (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne, ENS Cachan - École normale supérieure - Cachan)

Abstract

This paper studies how the intellectual property right (IPR) regime in destination countries influences the decision of firms between procurement from related parties and from independent suppliers while the latter may involve technology sharing or not. Using firm-level data on the mode choice for each transaction and a new product complexity measure, results confirm that firms are generally reluctant to source complex goods from outside firm boundaries. However, when technology is shared, IPRs promote outsourcing of more complex goods whereas without technology sharing, IPRs promote outsourcing of less complex products that are prone to reverse engineering and simpler to imitate.

Suggested Citation

  • Alireza Naghavi & Julia Spies & Farid Toubal, 2015. "Intellectual property rights, product complexity and the organization of multinational firms," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01306653, HAL.
  • Handle: RePEc:hal:cesptp:hal-01306653
    DOI: 10.1111/caje.12161
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01306653
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    Citations

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    Cited by:

    1. repec:bla:reviec:v:25:y:2017:i:3:p:626-648 is not listed on IDEAS
    2. Massimiliano Bratti & Giulia Felice, 2012. "Buyer-Supplier Relationships, Internationalization and Product Innovation," Development Working Papers 327, Centro Studi Luca d'Agliano, University of Milano, revised 13 Nov 2012.
    3. Alireza Naghavi & Shin-Kun Peng & Yingyi Tsai, 2017. "Relationship-specific Investments and Intellectual Property Rights Enforcement with Heterogeneous Suppliers," Review of International Economics, Wiley Blackwell, vol. 25(3), pages 626-648, August.
    4. Sara Biancini & Pamela Bombarda, 2017. "Intellectual Property Rights, Multinational Firms and Technology Transfers," CESifo Working Paper Series 6769, CESifo Group Munich.
    5. Verena Nowak & Christian Schwarz & Jens Suedekum, 2012. "On the Organizational Structure of Multinational Firms - Which Sourcing Mode for which Input?," CESifo Working Paper Series 3823, CESifo Group Munich.
    6. Fernandez Donoso, Jose, 2017. "A simple index of innovation with complexity," Journal of Informetrics, Elsevier, vol. 11(1), pages 1-17.
    7. José Fernández Donoso, 2015. "Foreign IPR, Trade and Innovation: Does complexity matter?," Serie Working Papers 23, Universidad del Desarrollo, School of Business and Economics.
    8. Sara Biancini & Pamela Bombarda, 2017. "Intellectual Property Rights, Multinational Firms and Technology Transfers," THEMA Working Papers 2017-16, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    9. Olena Ivus & Walter Park & Kamal Saggi, 2015. "Patent Protection and the Industrial Composition of Multinational Activity: Evidence from U.S. Multinational Firms," Vanderbilt University Department of Economics Working Papers 15-00014, Vanderbilt University Department of Economics.

    More about this item

    Keywords

    intellectual property right; technology sharing; outsourcing;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • 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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