International Technology Licensing, Intellectual Property Rights, and Tax Havens
43 Pages Posted: 27 Nov 2019 Last revised: 3 Jan 2020
Date Written: November, 2019
Abstract
This paper investigates the determinants of international technology licensing using data for 41 countries during 1996-2012. A multi-country model of innovation and international technology licensing yields a dynamic structural gravity equation for royalty payments as a function of fundamentals, including: (i) imperfect intellectual property protection and (ii) tax havens. The gravity equation is estimated using nonlinear methods. The model’s fundamentals account for 56% of the variation in royalty payments. Counterfactual analysis sheds light on the role of intellectual property rights and tax havens on international technology licensing.
Keywords: Technology diffusion, royalty payments, intellectual property rights
JEL Classification: F12, O33, O41, O47
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