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Intellectual property rights, multinational firms and technology transfers

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  • Sara Biancini

    (THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université)

  • Pamela Bombarda

    (THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université)

Abstract

Intellectual property rights (IPR) protect firms from imitation and are considered crucial to promote innovation and technological diffusion. This paper examines the im- pact of IPR on import sourcing decisions of multinationals. We consider a framework in which multinational firms offshore production of an intermediate good in a developing country. Firms can either decide to import the intermediate from vertically integrated producers, or from independent suppliers. In both cases, offshoring part of the produc- tion process embodies a risk of imitation. The model predicts that, under reasonable assumptions, stronger IPR encourage by a larger extent the imports of intermediates through vertical integration. Using U.S. Related-Party Trade database, we find empiri- cal evidence supportive of the positive link between level of IPR and the relative share of imports from vertically integrated manufacturers.
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  • Sara Biancini & Pamela Bombarda, 2021. "Intellectual property rights, multinational firms and technology transfers," Post-Print hal-03474978, HAL.
    • Handle: RePEc:hal:journl:hal-03474978
    DOI: 10.1016/j.jebo.2021.02.005
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    Cited by:

    1. Claudia Canals & Michael A. Klein & Fuat Şener, 2023. "Intellectual property‐related preferential trade agreements and US offshoring to developing countries," Review of International Economics, Wiley Blackwell, vol. 31(4), pages 1442-1475, September.
    2. Wang, Lei & Ramsey, Thomas Stephen, 2024. "Digital divide and environmental pressure: A countermeasure on the embodied carbon emissions in FDI," Technological Forecasting and Social Change, Elsevier, vol. 204(C).

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    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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