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Intellectual Property Rights and Foreign Direct Investment: A Welfare Analysis

Hitoshi Tanaka () and Tatsuro Iwaisako ()
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Hitoshi Tanaka: Faculty of Economics, Hokkai-Gakuen University

No 13-15, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper examines how intellectual property rights (IPR) protection affects innovation and foreign direct investment (FDI) using a North-South quality-ladder model incorporat- ing the exogenous and costless imitation of technology and subsidy policies for both R&D and FDI. We show that for the interior steady state to be stable, either R&D or FDI sub- sidy rates must be positive in the costless imitation model. Our findings also indicate that strengthening IPR protection promotes both innovation and FDI. Moreover, a strengthen- ing of IPR protection can also improve welfare if the initial IPR protection in the South is weak.

Keywords: foreign direct investment; innovation; intellectual property rights protection (search for similar items in EconPapers)
JEL-codes: F43 O33 O34 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2013-07
New Economics Papers: this item is included in nep-cse, nep-ino, nep-ipr, nep-pr~ and nep-knm
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Journal Article: Intellectual property rights and foreign direct investment: A welfare analysis (2014) Downloads
Working Paper: Intellectual Property Rights and Foreign Direct Investment: A Welfare Analysis (2013) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:1315

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