Intellectual property rights,product complexity and the organization of multinational firms

This paper studies how the intellectual property right (IPR) regime in destination countries influences the decision of firms between procurement from related parties and from independent suppliers while the latter may involve technology sharing or not. Using firm‐level data on the mode choice for each transaction and a new product complexity measure, results confirm that firms are generally reluctant to source complex goods from outside firm boundaries. However, when technology is shared, IPRs promote outsourcing of more complex goods whereas without technology sharing, IPRs promote outsourcing of less complex products that are prone to reverse engineering and simpler to imitate.     

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

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 a North–South 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 because it encourages a JV, whereas policies to limit foreign ownership in a JV gain importance in technology‐intensive industries as complementary policies to strong IPRs.     

Firm survival and exit in response to trade liberalization

Abstract.  This paper considers the implications of changing trade barriers for the survival of Canadian manufacturing firms. The findings suggest that Canadian tariff reductions decreased the probability of survival for Canadian firms while declines in American tariffs increased that probability. Combining these effects, two‐thirds of Canadian manufacturing firms saw their probability of survival increase as a result of the tariff reductions mandated by the Canada‐US Free Trade Agreement. However, the vulnerability of a firm to failure as a result of trade liberalization was mitigated by the characteristics of that firm, particularly scale and leverage. JEL classification: F1, L1     

Modes of Foreign Direct Investment and Intellectual Property Rights Protection: Wholly‐owned or Joint Venture? Firm‐level Evidence from Taiwanese Multinational Manufacturing Enterprises

This paper finds evidence from Taiwanese manufacturing multinational enterprises (MNEs) for the period 2003–2005 to show that Taiwanese manufacturing MNEs are more likely to choose joint ventures (JVs) if intellectual property rights (IPRs) protection in the foreign direct investment (FDI) host country is strong. The estimation results suggest that if a country with an IPR strength similar to the level of Chile increases its IPR protection to the strength of Taiwan, the probability of forming JVs in that country will increase by 13.8%. One policy implication of this study is that developing countries can stimulate local participation by IPR reform.     

Duration of new firms: The role of startup financial conditions,industry and aggregate factors

This paper documents the relative importance of firm, industry and aggregate factors on the post-entry performance of new firms. This study utilizes a unique administrative dataset, T2LEAP, which contains employment and balance sheet information for all incorporated Canadian firms. The data allow us to include financial variables such as the debt-to-asset ratio (leverage) and document their impact on firm survival. We perform duration analysis on all the entrant manufacturing firms during the period 1985–1996. In addition to leverage, we find that: firm characteristics such as size and labour productivity; industry conditions, such as the real exchange rate, the difference in the US–Canada tariff rates, entry penetration, and the capital–labour ratio; and aggregate conditions in terms of the yield gap also play a role in the survival prospects of new firms.     

INTELLECTUAL PROPERTY RIGHTS AND ECONOMIC GROWTH

This paper studies the relationship between intellectual property rights (IPRs) and economic growth for a cross-section of countries for the period 1960–1990. The analysis focuses on effects of IPRs on growth using a quantitative index of IPRs. The paper finds that IPRs affect economic growth indirectly by stimulating the accumulation of factor inputs like R&D and physical capital. The positive effects of IPRs on factor accumulation, particularly of R&D capital, are present even when the analysis controls for a more general measure of property rights     

Firm Dynamics in Retail Trade: The Response of Canadian Retailers to Exchange Rate Shocks

We use comprehensive firm‐level data to estimate the responses of heterogeneous Canadian retail firms to real exchange rate movements. Our analysis focuses on a period characterized by large fluctuations in the Canadian dollar, providing an opportunity to quantify both intensive and extensive margin responses in retail industries to real exchange rate shocks and to examine how those responses differ across firms, locations, and sub‐industries. Our results indicate that a real Canadian currency appreciation significantly reduces a retailer's sales, employment, and profits. The strength of this negative effect is decreasing in the distance of a retailer from the US‐Canada border. We do not find evidence of a strong relationship between real exchange rate movements and the number of operating firms nor the probability of firm survival. These findings are consistent with the view that a real Canadian dollar appreciation increases cross‐border shopping by Canadians, resulting in a negative demand shock for Canadian retailers, and the dominant response by firms to such a shock is through the intensive margin.     

Intellectual property rights as development determinants

Abstract While intellectual property rights (IPRs) are the key drivers of economic performance in R&D based growth models, they have not been fully explored in empirical development studies. We introduce IPRs to this literature, using Two‐Stage Least Squares Bayesian Model Averaging to address endogeneity and model uncertainty at the instrument and income stages. We show that IPRs exert effects similar to ‘Rule of Law’ and therefore provide robust evidence that both physical and intellectual property rights are crucial development determinants. We document that unenforced IPRs exert no effect on development. Instead, it is the level of enforced IPRs that causes development.     

Organizational forms in the knowledge economy: a comparative institutional analysis

This paper provides a framework with which to analyze organizational forms in the knowledge economy. We focus on an important trade-off facing modern firms: firms can acquire the property of all the innovations developed by their employees and can greatly increase their profits, yet this type of private intellectual property rights regime can discourage the innovative effort of the very same workers. Allowing workers to carry their knowledge outside the firm eliminates this disincentive. Hence, strategic complementarities may exist between innovative partners and a disclosure driven intellectual property rights regime, and passive employees and a private intellectual property rights regime. An evolutionary game theoretic model demonstrates these strategic complementarities and shows when economies tend towards disclosure driven or private intellectual property rights regimes.     

Trade‐related intellectual property rights: industry variation and technology diffusion

Abstract This paper assesses how a strengthening of intellectual property rights (IPRs) affects international technology diffusion by altering the volume of high‐tech exports into developing countries. A simple North‐South general equilibrium model in which industries differ in their imitation rates is developed. Stronger IPRs encourage Northern firms in a wider range of industries to start exporting. Exports in industries with the highest risk of imitation rise, while exports in other industries may fall. More technology diffuses to the South because new high‐tech products are introduced in the Southern market. This works against the reduction in technology diffusion caused by limited imitation.     

Innovation or imitation? The effect of spillovers and competitive pressure on firms’ R&D strategy choice

In this paper a firm’s R&D strategy is assumed to be endogenous and allowed to depend on both internal firm characteristics and external factors. Firms choose between two strategies, either they engage in R&D or abstain from own R&D and imitate the outcomes of innovators. This yields three types of equilibria, in which either all firms innovate, some firms innovate and others imitate, or no firm innovates. Firms’ equilibrium strategies crucially depend on external factors. We find that the efficiency of intellectual property rights protection positively affects firms’ incentives to engage in R&D, while excessive competitive pressure has a negative effect. In addition, smaller firms are found to be more likely to become imitators when the product is homogeneous and the level of spillovers is high. Regarding social welfare our results indicate that strengthening intellectual property protection can have an ambiguous effect. In markets characterized by a high rate of innovation a reduction of intellectual property rights protection can discourage innovative performance substantially. However, a reduction of patent protection can also increase social welfare because it may induce imitation. This indicates that policy issues such as the optimal length and breadth of patent protection cannot be resolved without taking into account specific market and firm characteristics.     

Intellectual property rights protection and recorded music sales��focus on 26 OECD countries panel data

This thesis mainly studies the relationship between intellectual property rights protection and recorded music sales by use of 26 OECD countries panel data from 2000 to 2007. Following Png and Wang (2006), the production equation of recorded music is developed. Meanwhile, the author introduces other independent variables such as per capita GDP, employment rate and R&D, population and economic openness. The econometric methods consist of two way fixed effects method, Arellano-Bond dynamic panel-data estimation and dynamic panel-data estimation, one-step difference GMM (generalized method of moments) by use of Stata 10.0. The findings are as followings: Intellectual property rights (IPRs) protection exerts positive effect on recorded music sales, and the influencing coefficient is at the range of 0.815 to 0.915. Meanwhile, economic openness also has positive influence. The studying results suggest that IPRs protection can reinforce the sale of recorded music, and it is very urgent to enhance IPRs protection.     

What deters labor-owned firm creation? Evidence from Italian manufacturing sectors

We analyze the determinants of labor-owned versus capital-owned firm creation. We match firm-level information on a large sample of new manufacturing firms with available industry-level proxies of the main determinants of ownership structures according to existing economic theories. We estimate a logit model and quantify the empirical contribution of each argument to explain labor-owned versus capital-owned firm entry. Our results show that human capital specificity and workers heterogeneity largely explain labor-owned firm entry, while other dimensions, such as limited worker wealth, have a weaker statistical relevance. These findings are robust to different estimation methods and are unlikely to be affected by endogeneity concerns. Our results contribute to the general understanding of the endogenous dynamics of ownership rights distribution in manufacturing firms and to the elaboration of policy initiatives aimed at supporting cooperative modes of firm organization.     

Intellectual property rights and innovation in developing countries

This paper studies intellectual property rights (IPRs) and innovation in developing countries. A model is developed to illustrate the trade-off between imitating foreign technologies and encouraging domestic innovation in a developing country's choice of IPRs. It is shown that innovations in a developing country increase in its IPRs, and a country's IPRs can depend on its level of development non-monotonically, first decreasing and then increasing. Empirical analysis, with a panel of data for 64 developing countries, confirms both the positive impact of IPRs on innovations in developing countries and the presence of a U-shaped relationship between IPRs and economic development.     

知识产权能力、外部知识产权保护强度与企业成长性

在知识经济背景下,知识产权能力是企业发展不可或缺的能力。从创造、运用、管理3个维度剖析了企业知识产权能力,探讨其对企业成长的影响机制,并分析了区域知识产权保护强度在这一过程中的调节作用。通过对计算机应用上市企业数据的实证分析,发现知识产权能力可以有效促进企业成长,企业所在区域知识产权保护强度对这一影响存在显著正向调节作用。     

Empirical studies of trade marks – The existing economic literature

This paper surveys empirical studies employing trade mark data that exist in the economic literature to date. In the introductory section we summarise the theory of trade marks. Section 2 documents the use of trade marks by firms of different size and industry and by firms in several advanced countries, including Australia, the UK, and the USA. Section 3 reviews various attempts to gauge the function of a trade mark as an indicator of innovation and product differentiation. Section 4 surveys studies that have demonstrated firms' incentives to use trade marks, including transferring information to consumers, realising synergies between different types of intellectual property rights, strategies to raise rivals' costs and using trade mark portfolios as debt collateral. In Section 5, we provide an overview of the importance of trade-mark-use for firm survival and the association of trade marks with several dimensions of firm performance, including productivity and their ability to generate well-paid jobs.     

行业知识产权风险与企业自主创新投资研究

基于2005-2007年广东省高技术企业调查数据,结合我国的知识产权制度和市场背景,首次从行业层面界定并衡量企业自主创新中的知识产权风险——知识外溢风险与知识产权法律风险,并实证检验了两种风险对企业研究与开发投资的影响。研究发现,知识外溢程度的提高并未降低企业的研究与开发投资,知识外溢的正外部性效应大于风险效应,而知识产权法律风险则不利于企业的研究与开发投资。最后,为企业的自主创新管理和知识产权管理提供有益的建议。     

Uncovering asset stripping during China's privatization

This paper empirically studies the occurrence and extent of asset stripping via undervaluing public assets during the mass privatization of state-owned and collectively owned enterprises in China. Using three waves of a national survey of private firms, we provide evidence that state-owned and collectively owned assets were substantially underpriced, indicating the presence of corruption during privatization. Further analysis shows that the extent of underpricing is more severe in regions with less market competition or weaker property rights protection, and more pronounced for intangible assets such as intellectual property rights and land use rights. When comparing firm efficiency between privatized firms and de novo private firms, we find that the former group continues to enjoy considerable preferential treatments, yet significantly underperforms the latter, possibly due to continued government control and intervention. Finally, we provide evidence that insider privatization is an important source of corruption during the privatization process.     

Interdependence and spillovers: is firm performance affected by others’ innovation activities?

The creation of new knowledge is a case in which agents' behaviour can affect the performance of other actors positively, given that new knowledge creates positive externalities in the market. In this context, we investigate the existence of performance spillovers associated with innovation activities by quantifying the innovation produced in surrounding firms and controlling for the fact that a firm is itself an innovation producer. We use data from the Third Community Innovation Survey (CIS III) that measures innovation in a broad way, not reducing it to R&D and patents, which departs from previous literature on spillovers. Furthermore, to tackle the endogeneity of the innovation variables on the firm production decision, we resort to the firm intellectual property protection methods as an instrument. We found a positive spillover of innovation on firm value added. The results also show that process innovation spillovers are more prevalent than product innovation spillovers.     

Impact of firm size and industry type on R&D efficiency throughout innovation and commercialisation stages: evidence from Korean manufacturing firms

Technological innovation through R&D is a critical element in enhancing and fostering firm performance. In particular, measurement of R&D efficiency throughout the innovation and commercialisation stages is important. However, almost of R&D efficiency-related studies assumed that R&D is a single stage. This study aims at analysing relative efficiency scores throughout the stages of the R&D process using a two-stage data envelopment analysis (DEA) model with a sample of 1039 Korean manufacturing firms. Based on our preliminary results, this study was extended by comparing subsample groups categorised by firm size and industry type. The key findings include: (1) firms show imbalanced R&D efficiency throughout the two stages and (2) R&D efficiency is different by firm size and industry type. The empirical results and findings may assist policy- and decision-makers to enhance R&D efficiency at the firm level. Moreover, introduction of the two-stage DEA model and comparative analysis methods to firm-level data contributes to scholars.