Branstetter, Fisman and Foley (2006)
|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.|
|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:|
|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:|
|Data Collection Methods:|
|Data Analysis Methods:|
|Cross Country Study?:||Yes|
|Government or policy study?:||No|
|Time Period(s) of Collection:||
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
|Level of aggregation:||Country|
|Period of material under study:||1982-1999|