Innovation or imitation?

Joseph P.H. Fan, Stuart L. Gillan and Xin Yu

Journal of Multinational Financial Management, 2013, vol. 23, issue 3, 208-234

Abstract: We study how uncompensated research and development (R&D) spillovers – the leakage of proprietary information through imitation or theft – affect firms’ investment decisions. Using variation in property rights protections across different regions within China we find that (1) uncompensated spillovers are greater in regions with weaker property rights, (2) such spillovers are associated with lower R&D expenditures, and (3) the latter is exacerbated in low property rights regimes. In addition to identifying a specific channel through which legal protections affect incentives for innovation and R&D, our results support arguments in the literature that the enforcement of property rights affects firm investment and growth.

Keywords: Innovation; Imitation; Intellectual property rights (search for similar items in EconPapers)
JEL-codes: G1 O3 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:23:y:2013:i:3:p:208-234

DOI: 10.1016/j.mulfin.2013.03.001

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