Non‐Tariff Measures,Specific Trade Concerns and Tariff Reduction

This paper studies the determinants of the recent proliferation of Specific Trade Concerns raised at the WTO on non‐tariff trade measures (NTMs), with a focus on sanitary and phytosanitary (SPS) and technical barriers to trade (TBTs). Even though NTMs are imposed de jure to protect consumers from unhealthy products, they increase trade costs de facto. So, when tariff protection lowers, NTMs become effective barriers to trade and the exporting countries can complain at the dedicated committee at the WTO (STCs). Therefore, we study whether STCs are raised by exporting countries as a consequence of tariff reductions in importing countries, that is when non‐tariff measures become barriers to trade. Using a recent database on STCs over the period 1996–2010, we find empirical evidence that SPS and TBT concerns are raised by exporting country as a consequence of importer's tariff cut.     

Appropriation of Innovation and Patent Behaviors of Technological Firms in the Yangtze Delta Area

In the transition from “made in China” to “invented in China,” what is the motivation of Chinese firms in applying for patents? Why do some firms bypass patents? How is patenting developing within Chinese firms? This paper attempts to answer these questions using data of Chinese firms in the Yangtze River Delta region. Results indicate that, for product innovation, obtaining the lead time for market entry is of top priority in innovation protection, followed by confidentiality and patent protection. As for process innovation, confidentiality ranks first, followed by patent protection and obtaining the lead time. There is a significant and positive relationship between prior experience of patent licensing and possibility of future patent licensing. Firms with painful patent litigation experience tend to avoid it in the future. It is also found that there are great differences in patent behaviors between Chinese enterprises and their foreign counterparts.     

Financial integration,productivity and capital accumulation

Understanding the mechanism through which financial globalization affects economic performance is crucial for evaluating the costs and benefits of opening financial markets. This paper is a first attempt at disentangling the effects of financial integration on the two main determinants of economic performance: productivity (TFP) and investment. I provide empirical evidence from a sample of 70 countries observed between 1975 and 1999. The results for both de jure and de facto indicators suggest that financial integration has a positive direct effect on productivity, while it does not directly affect capital accumulation. I also control for indirect effects of financial globalization through financial development and banking and currency crises. While financial integration does not systematically increase domestic financial depth, it may raise the likelihood of banking crises, though only to a minor extent. Yet, the overall effect of financial liberalization remains positive for productivity and negligible for investment.     

Financial integration, productivity and capital accumulation

Understanding the mechanism through which financial globalization affects economic performance is crucial for evaluating the costs and benefits of opening financial markets. This paper is a first attempt at disentangling the effects of financial integration on the two main determinants of economic performance: productivity (TFP) and investment. I provide empirical evidence from a sample of 70 countries observed between 1975 and 1999. The results for both de jure and de facto indicators suggest that financial integration has a positive direct effect on productivity, while it does not directly affect capital accumulation. I also control for indirect effects of financial globalization through financial development and banking and currency crises. While financial integration does not systematically increase domestic financial depth, it may raise the likelihood of banking crises, though only to a minor extent. Yet, the overall effect of financial liberalization remains positive for productivity and negligible for investment.     

There will be exports and licensing: The effects of patent rights and innovation on firm sales

Previous work has focused on how intellectual property rights affect inward technology transfer. This paper is among the first to study whether patent rights contribute to outward technology transfers. Patent protection can affect the ability of firms to be sources of technology through its effects on innovation and commercialization. Using micro data, this paper finds that patent rights and innovation are positively associated with the exporting and licensing of firms, controlling for other determinants of technological capacity, although the effect is not symmetric across firms in all countries. Patent rights have a strong impact on the export and licensing activities of firms in developed countries, and only on the licensing activities of firms in developing countries. Moreover, transfers of technology develop sequentially – namely, exporting before licensing – due to the differing sunk costs of each type of entry. The results have implications for how innovation policies and activities contribute to the outward orientation of firms.     

我国专利权边境保护的现存问题及其制度重构——兼论自贸区专利权边境保护问题

专利权边境保护是各国海关执法的难题。我国海关在专利权保护中也存在着自贸区内专利权边境执法空白、专利权侵权判定困难、边境保护程序与其他行政或司法程序缺乏有效衔接等问题。鉴于此,我国应对专利权边境保护制度进行重构,从根本上改革当前传统的边境保护模式与程序,强化权利人利用边境保护程序进行不正当竞争的法律责任,合理分配专利权人与货方的权利与义务,引入多方参与侵权认定制度,从而更好地服务于我国的创新发展战略。     

Foreign investment in North America and the pharmaceutical industry in Canada

Unique among developed countries in denying patent protection for pharmaceuticals, Canada modified her laws in 1987 and again in 1993 to meet international standards, thereby permitting her to participate in NAFTA and become a signatory of the TRIPS of the Uruguay Round. Canada's concerns for containing health costs and providing quality health care for all its citizens were important factors in her original position. It was only as a result of international pressure and an alliance between the multinational pharmaceutical firms and the university community in Canada that she offered greater patent protection. The results of these changes had an immediate effect on improving the business environments and significant investments by the multinational pharmaceutical firms have increased substantially since 1987.     

Fiscal and Regulatory Impediments to the Entry of New Firms in Five Transition Economies

ABSTRACT

This article focuses on the impact of fiscal and regulatory measures, at various levels of government, on the establishment of new businesses. We are interested in finding out whether, and to what extent, the existing rules and regulations (in particular the fiscal and regulatory frameworks) have impeded the entry of new firms in the early stages of transition. We are also interested in comparing the impact of such impediments amongst countries in different stages of transition. The paper is based on a survey of nearly 400 newly set up (de novo) firms in the Czech Republic, Hungary, Poland, Albania and Lithuania, all established in the 1992-94 period. We concentrate on four specific areas of regulation: registration and licensing of new businesses, rules governing the purchase or lease of commercial real estate, labour and employment laws, and the fiscal rules (taxes and contributions) to which new enterprises are subjected.     

Domestic regulation,import penetration and firm-level productivity growth

This paper shows that the impact of import penetration on firms’ productivity growth depends on firms’ distance to the efficiency frontier and on product market regulation. Using firm-level data for a substantial number of OECD countries from the late 1990s to late 2000s, the analysis reveals nonlinear effects of both sectoral import penetration and de jure product market regulation measures, depending on firms’ positions along the global distribution of productivity. Close to the technology frontier, import penetration has a strongly positive effect on firm-level productivity growth, with less stringent domestic regulation enhancing this effect substantially. However, far from the frontier, the effect of import penetration on firm-level productivity growth is much smaller and often not significant. Its interaction with domestic regulation generally has no statistically significant effect either. The heterogeneous effects of import penetration and domestic product market regulation on firm-level productivity growth are consistent with a neo-Schumpeterian view of trade and regulation.     

Dynamic openness and finance in Africa

This study assesses dynamics of openness and finance in Africa by integrating financial development dynamics of depth, activity and size in the assessment of how financial, trade, institutional, political and other openness policies (of second generation structural and institutional reforms) have affected financial development. The empirical evidence is based on Generalized Method of Moments with data from 28 African countries for the period 1996–2010. The following findings are established. (1) While the de jure (KAOPEN) indicator of financial openness improves financial depth, the de facto (FDI) measurement decreases it, with the effect of the latter measure positive on financial size. (2) Whereas trade openness improves financial depth, its effect on financial activity and size is negative. (3) Institutional openness has a positive effect on financial dynamics of depth and activity, while its effect on financial size is negative. (4) Political openness and economic freedom are detrimental to financial depth and activity. Justifications for these nexuses are discussed.     

Quid pro quo and the enforcement of intellectual property rights protection: A bargaining approach

This article models a North–South negotiation where the North provides a quid pro quo in exchange for the strengthening of the enforcement of intellectual property rights (IPR) protection in the South. We show that when Northern and Southern firms compete on quantity in the Southern market, the South's optimal choice is either complete protection or complete violation, irrespective of different levels of IPR protection being available. We show this to depend on the Southern government's valuation of the quid pro quo and the Northern firm's level of technology.     

Licensing versus direct investment: implications for economic growth

We develop a symmetric two country model of foreign direct investment (FDI) that captures the internalization decision and its implications for both the rate and magnitude of innovations. When mode choice (licensing versus FDI) is fixed, a subsidy to multinational production increases the rate but decreases the size of innovations. When mode can switch, the rate and size of innovations both increase, provided the subsidy is not too large. Although innovation size decreases for industries where firms already were choosing FDI, innovation size increases for industries where firms switch from licensing to FDI because multinationals choose larger innovations than licensors.     

North-South technology transfer through licensing

The incentives of Southern governments to protect intellectual property rights are examined when Northern innovating firms license technology to Southern firms in a game with asymmetric information. Southern firms may or may not be able to imitate after they license the technology, and Northern firms do not know whether the Southern firm can imitate. The form of the licensing contract and the distribution of the gains from licensing will affect the incentives of Southern countries to protect patents. Southern consumers gain from patent infringement but at the expense of Southern firms that cannot acquire licenses at the most favorable terms.     

Executive integrity,audit opinion,and fraud in Chinese listed firms

We examine the influence of auditors on mitigating corporate fraud in China, which is known to have weak legal enforcement, weak investor protection along with tight control of the media and labour unions. We find that firms with executives that have lower integrity, indicated by a greater degree of earnings manipulation, are associated with higher propensity of regulatory enforcement actions against corporate fraud in the subsequent year. We show that this effect is moderated by the issuance of a modified audit opinion report by the auditors. This finding implies that auditors can serve as external governance mechanism to discourage executives with lower integrity in committing fraud. Our results have policy implications for further strengthening auditor independence in emerging countries like China.     

Patent enforcement across 51 countries – Patent enforcement index 1998–2017

Indices are central for comparing the strength of patent systems across countries in international business research, intellectual property management and policymaking. However, existing approaches rely on book laws while most variance across countries emerges from enforcement. We address this weakness and present the Patent Enforcement Index which tracks differences in patent enforcement for 51 countries between 1998 and 2017. We utilize novel firm-level enforcement data and extend the conceptual framework of the patent systems strength index provided by Papageorgiadis et al. (2014). The new index reveals previously uncaptured volatility in patent enforcement and can be decomposed into three topical sub-indices.     

The Comparative Influence of Government Funding by the U.S. Commerce Department's Advanced Technology Program and Private Funding on the Marketing Strategy of High-Tech Firms

SUMMARY

This paper conducts an exploratory study on whether high-tech venture firms funded by a United States Federal Government program–Department of Commerce Advanced Technology Program (ATP)–pursue different types of marketing strategies and different goal levels than firms without such funding. A sample of ATP and non-ATP-funded firms was used. Nineteen hypotheses relating to commercialization processes, i.e., types of strategy (licensing), types of commercial advantage (new, innovative solutions), and types of commercialization applications (product vs. process) and four hypotheses relating to levels of performance (levels of cost reduction) were tested. Small ATP firms are more likely to pursue best practice marketing policies such as R&D collaboration, and licensing strategies, and to pursue higher cost reduction and performance goals than non-ATP firms.     

Noncooperative,cooperative, and delegative R&D

We discuss alternative organizational forms of research and development in a symmetric duopoly framework. Firms play a noncooperative game at the output stage but can collaborate at the R&D stage. In the absence of patent protection, technology licensing that prevents imitative R&D may emerge as an equilibrium outcome. In general, greater probabilities of success in R&D rule out noncooperative arrangement at the R&D stage. Delegative R&D, where firms move sequentially, tends to dominate the cooperative form of R&D.Department of Economics, Monash University     

A Note on the Incidence and Possible Cost of “Critical Circumstances” Penalties in U.S. Antidumping Enforcement

This article examines the incidence and possible cost of “Critical Circumstances” penalties in U.S. antidumping enforcement. Critical Circumstances penalties are surprisingly common. Of the 297 foreign firms that were assessed antidumping duties greater than 25% during the period 1980–1995, 89 (or 30%) were also assessed a Critical Circumstances penalty. The volume of imports affected by these Critical Circumstances penalties was approximately $991 million over the 15 year period (or about $66 million per year). The average level of the Critical Circumstances penalties was about 79% of the value of the relevant commerce, assessed for a period of up to 90 days, or as much as $13 million per year. The economic cost to the United States from Critical Circumstances penalties comes largely from the reduction in export levels (increase in prices) that foreign firms may make in the expectation that a Critical Circumstances penalty may be assessed. The article presents evidence that foreign firms have restricted their exports to the United States to avoid or minimize Critical Circumstances penalties, and discusses a simple model that may illustrate how foreign firms react to the possibility of such penalties.     

Patent Protection,Startup Takeovers,and Open Innovation

Abstract

Open innovation largely relies on startup innovators transferring their R&D to incumbent firms. Yet, such innovators are at a disadvantage when faced with incumbents holding patent portfolios, raising the question why do such Lilliputian firms choose to innovate? In view of this, we study the impact of patent protection on the innovation incentives of startup firms in a dynamic model where an incumbent faces a sequence of potential startups and the incumbent’s chance of winning an infringement lawsuit increases with the size of its patent portfolio. It is shown that open innovation–style takeover deals generate extra benefits for the incumbent via its enhanced future bargaining positions, a part of which accrues to the current startup as an increased bargaining share, justifying R&D activity that would not have taken place otherwise.     

Portfolio Flows to Emerging Markets: Prospects,Pitfalls and Policy Implications

ABSTRACT

This paper examines the pattern of debt and equity portfolio flows (FPI) to the developing countries in recent years and discusses some policy and operational measures to facilitate greater FPI flows. Our analysis suggests that many countries need to adopt more aggressive measures to attract foreign portfolio investment. The major areas where improvements can facilitate FPI are identified as: political and legal environment, private sector development, improvement in macro-economic management, development of capital markets, strengthening of financial institutions, enforcement of market regulations, improvements in market operations, and effective dissemination of market information.