Intellectual Property Rights and Entry into a Foreign Market: FDI vs. Joint Ventures

We study the effect of the intellectual property rights (IPR) regime of a host country (South) on a multinational's decision between serving a market via greenfield foreign direct investment to avoid the exposure of its technology or entering a joint venture (JV) with a local firm, which allows R&D spillovers under imperfect IPRs. JV is the equilibrium market structure when R&D intensity is moderate and IPRs strong. The South can gain from increased IPR protection by encouraging a JV, whereas policies to limit foreign ownership in a JV gain importance in technology intensive industries as complementary policies to strong IPRs.


Issue Date:
2006
Publication Type:
Working or Discussion Paper
Record Identifier:
http://ageconsearch.umn.edu/record/12089
PURL Identifier:
http://purl.umn.edu/12089
Total Pages:
40
Series Statement:
KTHC Nota di Lavoro 97.2006




 Record created 2017-04-01, last modified 2018-01-21

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