Branstetter, Fisman and Foley (2006)

Source Details

Branstetter, Fisman and Foley (2006)
Title:	Do stronger intellectual property rights increase international technology transfer? Empirical evidence from U.S. firm-level panel data
Author(s):	Branstetter, L. G., Fisman, R., Foley, C. F.
Year:	2006
Citation:	Branstetter, L.G., Fisman, R., & Foley, C. F. (2006). Do stronger intellectual property rights increase international technology transfer? Empirical evidence from U.S. firm-level panel data. The Quarterly Journal of Economics, 121(1), 321-349.
Link(s):	Definitive , Open Access
Key Related Studies:	Bessen and Maskin (2000) Branstetter (2000) Markusen (2000) Desai, Foley and Hines (2004)
Discipline:	L22: Firm Organization and Market Structure O34: Intellectual Property and Intellectual Capital
Linked by:

About the Data
Data Description:	Branstetter, Fisman, and Foley examine how technology transfer among U.S. multinational firms changes in response to a series of IPR reforms undertaken by 12 countries over the 1982-99 period.
Data Type:	Primary and Secondary data
Secondary Data Sources:	U.S. Bureau of Economic Analysis
Data Collection Methods:	Quantitative Collection Methods Quantitative data/text mining Qualitative Collection Methods Semi-Structured Interview
Data Analysis Methods:	Descriptive statistics (counting; means reporting; cross-tabulation) Regression Analysis
Industry(ies):
Country(ies):	United States Argentina Brazil China Indonesia Japan South Korea Mexico Philippines Spain Taiwan Thailand Turkey
Cross Country Study?:	Yes
Comparative Study?:	Yes
Literature review?:	No
Government or policy study?:	No
Time Period(s) of Collection:	1982 - 1999
Funder(s):

Abstract

"One of the alleged benefits of the recent global movement to strengthen intellectual property rights (IPRs) is that such reforms accelerate transfers of technology between countries. Branstetter, Fisman, and Foley examine how technology transfer among U.S. multinational firms changes in response to a series of IPR reforms undertaken by 12 countries over the 1982-99 period. Their analysis of detailed firm-level data reveal that royalty payments for intangibles transferred to affiliates increase at the time of reforms, as do affiliate research and development (R&D) expenditures and total levels of foreign patent applications. Increases in royalty payments and R&D expenditures are more than 20 percent larger among affiliates of parent companies that use U.S. patents more extensively prior to reform and therefore are expected to value IPR reform most. This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to understand the global impact of stronger intellectual property rights."

Main Results of the Study

• An increase in IPR (intellectual property rights) leads to an increase in technology transfers by multinationals.* The extent to which these transfers take place through licensing to third parties relative to affiliates will depend on the relative expertise of the multinational relative to domestic producers, the relative costs of transferring, and the shape of the ‘expropriation function’.* Greater IPR expands the product space over which the firm enjoys monopoly power. As a result, profits and price increase. While the firm’s sales also increase, aggregate sales remain unchanged, by construction.

Policy Implications as Stated By Author

IPR (intellectual property rights) are recommended as a means to increase firm profitability, output, and price.

Coverage of Study

Coverage of Fundamental Issues

Issue	Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)?
Harmony of interest assumption between authors and publishers (creators and producers/investors)
Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption)
Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)

Coverage of Evidence Based Policies

Issue	Included within Study
Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right)
Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction)
Mass digitisation/orphan works (non-use; extended collective licensing)
Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability)
Fair remuneration (levies; copyright contracts)
Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Datasets

Sample size:	13
Level of aggregation:	Country
Period of material under study:	1982-1999