Intellectual Property Rights and Foreign Direct Investment: The Optimal Policy with Technology Adoption
Year: 2025
Type: article
Abstract: Intellectual property rights (IPR) protection policies in Southern countries play a crucial role in the product cycle by restricting Southern firms from imitating products developed by Northern firms. In this paper, we incorporate the Southern government’s political decision into a North-South model, where foreign direct investment (FDI) from the North results in technology leakage to the South through imitation. We analyze the optimal IPR-protection policy in the South to show that the Southern government selects the least stringent level that still successfully attracts Northern FDI. We demonstrate that this result holds in a model with heterogeneous Northern firms.
Source: The International Economy
Author: Yoko Sakamoto
Institution: Meiji Gakuin University
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4412798464