COORDINATION OF TRADE AND INTELLECTUAL PROPERTY RIGHTS POLICIES

Te-Cheng Lu (), Jin-Li Hu () and Yan-Shu Lin
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Te-Cheng Lu: School of Accounting and Finance, Tan Kah Kee College, Xiamen University, P. R. China
Yan-Shu Lin: Department of Economics, National Dong Hwa University, No. 1, Sec. 2, Da Hsueh Rd., Shoufeng, Hualien 97401, ROC

The Singapore Economic Review (SER), 2023, vol. 68, issue 05, 1771-1785

Abstract: We employ a bilateral R&D spillover model to analyze how a domestic government coordinates its intellectual property rights (IPR) and trade policies and hence affects a foreign firm’s choice between export (EX) and foreign direct investment (FDI). We find that both firms’ profits increase with IPR protection if the IPR protection level in the domestic country is loose. The domestic country can coordinate trade and IPR policies and reach a high welfare level by affecting foreign firm’s entry decisions. The profitability and desirability may decrease with the strength of IPR protection and correspond to a welfare-reducing R&D.

Keywords: Intellectual property rights; tariff; R&D spillover; entry mode (search for similar items in EconPapers)
JEL-codes: F12 F13 F21 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1142/S0217590819500747

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