Protection of Intellectual Property Rights and Subsidy Policy for Foreign Direct Investment

Moonsung Kang ()
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Moonsung Kang: Korea University

East Asian Economic Review, 2012, vol. 16, issue 2, 139-154

Abstract: This paper provides a theoretical setup for an analysis of strategic relationships inherent to activities of an innovative multinational enterprise (MNE) and a local company in a host country. Additionally, we explore the incentives of the host country's government to provide subsidies to attract foreign direct investment (FDI) and to protect outcomes of R&D activities conducted by the MNE. We show that the MNE's commercial interests may collide with local companies’ over protection of IPRs. Therefore, the extent of knowledge spillovers from the MNE to the local company and the magnitude of incentives to the MNE perform a crucial function in determining the optimal policy mix of IPR protection and FDI subsidies of the host country's government.

Keywords: Foreign Direct Investment; Multinational Enterprises; Strategic Investment Policy; Knowledge Spillovers; Intellectual Property Rights (search for similar items in EconPapers)
JEL-codes: F12 F13 F21 F23 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:ris:eaerev:0074

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