Firm Heterogeneity and Weak Intellectual Property Rights
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Summary:
In weak intellectual property rights (IPR) environments, the imitation of proprietary technology by domestic firms has become a deterrent for foreign investment. Different multinationals may view this deterrent differently. This paper develops a model where firms with more technology are less likely to invest in weak IPR environments. If imitation is costly, the model predicts that multinationals with the lowest level and highest level of technology will invest in weak IPR environments, and multinationals with a moderate level of technology will invest only in strong IPR environments. Empirical analysis with firm level data is consistent with this non-monotonicity result.
Series:
Working Paper No. 2007/161
Subject:
Capital productivity Foreign direct investment Technology Transportation Wages
English
Publication Date:
July 1, 2007
ISBN/ISSN:
9781451867251/1018-5941
Stock No:
WPIEA2007161
Pages:
40
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