Firm Heterogeneity and Weak Intellectual Property Rights

Author/Editor:

Stanley B Watt

Publication Date:

July 1, 2007

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

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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