Do Stronger Intellectual Property Rights Increase International Technology Transfer? Empirical Evidence from U.S. Firm-Level Data

Abstract: "This paper examines how technology transfer within U.S. multinational firms changes in response to a series of IPR reforms undertaken by 16 countries over the 1982-1999 period. Analysis of detailed firm-level data reveals that royalty payments for technology transferred to affiliates increase at the time of reforms, as do affiliate R&D expenditures and total levels of foreign patent applications. Increases in royalty payments and R&D expenditures are concentrated among affiliates of parent companies that use U.S. patents extensively prior to reform and are therefore expected to value IPR reform most. For this set of affiliates, increases in royalty payments exceed 30 percent. Our results collectively imply that U.S. multinationals respond to changes in IPR regimes abroad by significantly increasing technology transfer to reforming countries." NBER Working Paper No. 11516 Issued in August 2005, by Lee Branstetter, Raymond Fisman and C. Fritz Foley (August 2005).

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Contributor: Persephone Economou
Published Date: September 6, 2005