Intellectual Property Rights and Entry into a Foreign Market: FDI vs. Joint Ventures

Alireza Naghavi and Dermot Leahy

No 2006.97, Working Papers from Fondazione Eni Enrico Mattei

Abstract: We study the effect of the intellectual property rights (IPR) regime of a host country (South) on a multinational's decision between serving a market via greenfield foreign direct investment to avoid the exposure of its technology or entering a joint venture (JV) with a local firm, which allows R&D spillovers under imperfect IPRs. JV is the equilibrium market structure when R&D intensity is moderate and IPRs strong. The South can gain from increased IPR protection by encouraging a JV, whereas policies to limit foreign ownership in a JV gain importance in technology intensive industries as complementary policies to strong IPRs.

Keywords: Joint Ventures; Intellectual Property Rights; Technology Transfer; R&D Spillovers; FDI Policy (search for similar items in EconPapers)
JEL-codes: F13 F23 L24 O24 O32 O34 (search for similar items in EconPapers)
Date: 2006-06
New Economics Papers: this item is included in nep-com and nep-ino
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Intellectual Property Rights and Entry into a Foreign Market: FDI vs. Joint Ventures (2006)
Working Paper: Intellectual Property Rights and Entry into a Foreign Market: FDI vs Joint Ventures (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2006.97

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