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Intellectual property rights, multinational firms and technology transfers

Author

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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.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • 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
    Note: View the original document on HAL open archive server: https://hal.science/hal-03474978v1
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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.

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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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