Multinationals, innovation and institutional context: IPR protection and distance effects
Saul Estrin and
LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library
We characterize the knowledge production process whereby the inventive capabilities of the firm generate innovation output in highly inventive multinational enterprises (MNEs). We explore the sensitivity of this relationship to the strength of intellectual property rights (IPR) protection across the MNEs R&D subsidiaries. We argue that MNE innovative performance will be enhanced when the firm’s R&D activities are based in locations where IPR protection is stronger. Moreover, when considering the internal geography of the MNEs R&D activities, innovation performance depends on the distance between the home- and host-country IPR regime. Thus, innovation performance is worse, as the difference between home and host IPR regimes increases. Finally, we explore asymmetries in this relationship, in particular that the deterioration is more marked when MNEs locate their R&D activities in host economies with IPR protection significantly less strict than in their home country. We test these ideas using a unique new dataset about the most innovative MNEs in the world, an unbalanced panel of around 900 MNEs observed for the period 2004 to 2013 and find strong support for all our hypotheses.
Keywords: multinationals; innovation; IPR protection; institutional distance; patents; inventive capabilities; 639633-MASSIVE-ERC-2014-STG; 822781-GROWINPRO; Internal OA fund (search for similar items in EconPapers)
JEL-codes: J01 L81 R14 (search for similar items in EconPapers)
Pages: 26 pages
New Economics Papers: this item is included in nep-cse, nep-ino, nep-int, nep-ipr, nep-isf, nep-sbm, nep-tid and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Published in Journal of International Business Studies, 1, December, 2022, 53(9), pp. 1945 - 1970. ISSN: 0047-2506
Downloads: (external link)
http://eprints.lse.ac.uk/110441/ Open access version. (application/pdf)
Journal Article: Multinationals, innovation, and institutional context: IPR protection and distance effects (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:110441
Access Statistics for this paper
More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().