Intellectual property rights and foreign direct investment: A welfare analysis

Hitoshi Tanaka and Tatsuro Iwaisako

European Economic Review, 2014, vol. 67, issue C, 107-124

Abstract: This paper examines how intellectual property rights (IPR) protection affects innovation and foreign direct investment (FDI) using a North–South quality-ladder model incorporating the exogenous and costless imitation of technology and subsidy policies for both R&D and FDI. We show that for the interior steady state to be stable, either R&D or FDI subsidy rates must be positive. Our findings also indicate that strengthening IPR protection promotes both innovation and FDI. Moreover, a strengthening of IPR protection can also improve welfare if the initial IPR protection in the South is weak and the R&D subsidy rate is not too high.

Keywords: Foreign direct investment; Innovation; Intellectual property rights protection (search for similar items in EconPapers)
JEL-codes: F43 O33 O34 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S001429211400021X
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Intellectual Property Rights and Foreign Direct Investment: A Welfare Analysis (2013)
Working Paper: Intellectual Property Rights and Foreign Direct Investment: A Welfare Analysis (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:67:y:2014:i:c:p:107-124

DOI: 10.1016/j.euroecorev.2014.01.013

Access Statistics for this article

European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer

More articles in European Economic Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().