1997 · 23 citations · 0 references
BusinessEconomicsInternational BusinessForeign Direct InvestmentInnovationTechnology TransferForeign Direct Investment StrategyIntellectual Property PolicyIntellectual Property ProtectionIntellectual Property RightsIntellectual Property StrategyInternational Intellectual Property LawForeign Direct Investment AnalysisForeign Direct Investment ContractsForeign Investment ProtectionIntellectual Property EconomicsIntellectual Property Protection StrategyProduct Cycle TheoryResource Scarcity Analysis
This paper develops a product cycle model with endogenous and costly innovation, imitation, and foreign direct investment (FDI) to address the concerns of developing nations that stronger intellectual property rights (IPR) protection would force them to waste scarce resources 'reinventing the wheel.' With stronger IPR protection, multinationals become safer from imitation, but no safer than Northern firms. Imitation becomes a more predominant channel of international technology transfer relative to FDI. Stronger IPR protection displaces FDI due to aggravated resource scarcity in the South. Reduced FDI transmits resource scarcity in the South back to the North and consequently contracts innovation.