Intellectual Property Rights and Foreign Technology Licensing in Developing Countries: An Empirical Investigation

42 Pages Posted: 30 May 2018

Date Written: July 2017

Abstract

The paper addresses the question of whether expanded and strengthened protection of intellectual property (IP) fosters technology transfer to developing countries. Cross-sectional analysis of a representative sample of firms operating in 42 developing economies indicates that going from no IP protection to maximum IP protection is associated with a 65% increase in the predicted probability of licensing foreign technology for the subpopulation of affiliated firms, whereas the predicted probability is not significantly different from zero for unaffiliated firms. We also find evidence that the environment in which a firm operates moderates the relationship of IP protection and firm-level technology licensing: while going from no IP protection to maximum IP protection is associated with a 47% increase in the predicted probability of licensing foreign technology for firms operating in upper-middle-income countries, there is at best no significant correlation for firms operating in lower-middle-income and low-income countries.

Keywords: developing countries, intellectual property rights, technology licensing, TRIPS Agreement

JEL Classification: L24, O14, O19, O34

Suggested Citation

Gentile, Elisabetta, Intellectual Property Rights and Foreign Technology Licensing in Developing Countries: An Empirical Investigation (July 2017). Asian Development Bank Economics Working Paper Series No. 515. Available at SSRN: https://ssrn.com/abstract=3187778 or http://dx.doi.org/10.2139/ssrn.3187778

Elisabetta Gentile (Contact Author)

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

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