Intellectual property rights, imitation, and development. The effect on cross-border mergers and acquisitions

Mercedes Campi, Marco Duenas, Matteo Barigozzi and Giorgio Fagiolo ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: In this paper, we analyze whether the recent global process of strengthening and harmonization of intellectual property rights (IPRs) affects decisions of cross-border mergers and acquisitions (M&As). We investigate if IPRs have a differential effect across sectors of different technology content and for countries of different development level. Also, we study how imitation abilities of target countries interact with the tightening of IPRs. Using data for the post-TRIPS period (1995-2010), we estimate an extended gravity model to study the bilateral number of M&As, including a measure of the strength of IPRs systems on target countries and a set of control variables usually considered as determinants of M&As. The estimation results verify the gravity structure for M&As and show that IPRs -and enforcement- influence decisions of cross-border M&As in all sectors regardless of their technological content. However, IPRs are more important in countries with high imitation abilities and in sectors of high-technology content. Furthermore, a strengthening of IPRs leads to a larger increase of M&As in developing countries than in developed countries. These results call the attention on the possible implications for least developed economies and challenge the adequacy of a globally harmonized IPRs systems.

Keywords: intellectual property rights; mergers and acquisitions; gravity model; technological intensity; imitation; international comparison (search for similar items in EconPapers)
JEL-codes: G34 O13 O14 O34 (search for similar items in EconPapers)
Date: 2018-09-12
New Economics Papers: this item is included in nep-com, nep-cse, nep-int, nep-ipr and nep-knm
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Published in Journal of International Trade and Economic Development, 12, September, 2018, 28(2), pp. 230-256. ISSN: 0963-8199

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http://eprints.lse.ac.uk/90203/ Open access version. (application/pdf)

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Journal Article: Intellectual property rights, imitation, and development. The effect on cross-border mergers and acquisitions (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:90203

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