Strategic Enforcement, Intellectual Property Rights, and Contractual R&D

14 Pages Posted: 31 Aug 2016

See all articles by Hamid Beladi

Hamid Beladi

University of Texas at San Antonio - College of Business - Department of Economics

Sugata Marjit

Centre for Studies in Social Sciences, Calcutta; Indian Institute of Foreign Trade; City University of Hong Kong (CityU) - Department of Economics & Finance

Xinpeng Xu

Hong Kong Polytechnic University - School of Accounting and Finance

Lei Yang

Hong Kong Polytechnic University

Date Written: October 2016

Abstract

This study examines the role of intellectual property rights (IPRs) in contractual research and development (R&D) in developing countries. We find that strong IPRs provide incentives for firms, both multinational and local, to specialize in R&D activities in which they have competitive advantage (the specialization effect). They also facilitate the switching process from imitators to potential innovators for local firms (the switching effect). Moreover, we also demonstrate that a multinational firm's strategic IPRs enforcement behavior can be an effective instrument for subsidizing contractual R&D in developing countries (the subsidizing effect). We further illustrate how a policy mix of IPRs and a foreign direct investment subsidy in these countries affects R&D activities by adding an offshore R&D subsidiary as an additional organizational form.

JEL Classification: L13, O31, O34

Suggested Citation

Beladi, Hamid and Marjit, Sugata and Marjit, Sugata and Xu, Xinpeng and Yang, Lei, Strategic Enforcement, Intellectual Property Rights, and Contractual R&D (October 2016). Economic Inquiry, Vol. 54, Issue 4, pp. 1904-1917, 2016, Available at SSRN: https://ssrn.com/abstract=2832480 or http://dx.doi.org/10.1111/ecin.12352

Hamid Beladi (Contact Author)

University of Texas at San Antonio - College of Business - Department of Economics ( email )

One UTSA Circle
P.O. Box 5636
San Antonio, TX 78249
United States
210-458-7038 (Phone)
210-458-7040 (Fax)

Sugata Marjit

Centre for Studies in Social Sciences, Calcutta ( email )

R 1, B.P. Township
Kolkata, West Bengal, India
Kolkata, West Bengal 700094
India

Indian Institute of Foreign Trade ( email )

New Delhi
QUTUB INSTITUTIONAL AREA
NEW DELHI, 110016
India

City University of Hong Kong (CityU) - Department of Economics & Finance ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

Xinpeng Xu

Hong Kong Polytechnic University - School of Accounting and Finance ( email )

Hung Hom
Kowloon
Hong Kong

Lei Yang

Hong Kong Polytechnic University ( email )

Hung Hom, Kowloon
Hong Kong
(852)34003457 (Phone)

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