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Negative Effects of Intellectual Property Protection: The unusual suspects?

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  • TAKECHI Kazutaka

Abstract

The negative effects of intellectual property protection (IPP) on trade volume were found in previous research findings in which market power effects dominate market expansion effects. Because both effects increase profits, IPP induces entry without ambiguity. However, using product-level entry data, negative effects on market supply are found after controlling for country-specific effects. An examination of entry mode choice (direct supply vs. licensing) reveals that while the direct supply mode is negatively related to IPP, licensing is not, implying that firms facing infringement risk or intense competition may avoid direct supply in IPP-stringent countries.

Suggested Citation

  • TAKECHI Kazutaka, 2012. "Negative Effects of Intellectual Property Protection: The unusual suspects?," Discussion papers 12057, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:12057
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    References listed on IDEAS

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    Cited by:

    1. Palangkaraya, Alfons & Jensen, Paul H. & Webster, Elizabeth, 2017. "The effect of patents on trade," Journal of International Economics, Elsevier, vol. 105(C), pages 1-9.

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