Intellectual Property Protection And Technology Transfer The Case Of Overseas R & D

This paper investigates whether, in what direction, and to what extent one mode of technology transfer – namely, overseas R&D – is influenced by the strength of intellectual property protection that host nations provide. Using data spanning the period 1977-2004, we find weak support at best for the claim that strengthening intellectual property rights will have a significant positive influence on the magnitude of overseas R&D investment by (US) multinationals. This result is found to be robust to dis-aggregation of both the measure of intellectual property protection into its component indices, as well as to dis-aggregation of overseas R&D into industry-specific magnitudes. Instead, the host country market size and availability of local human capital resources are found to be the consistently important explanatory variables. [CDE DSE WP NO 166]