Intellectual property protection and technology licensing: The case of developing countries

This paper investigates whether, in what direction, and to what extent one mode of technology transfer is influenced by the strength of intellectual property protection that host nations provide. Using data spanning the period 1977-1999, we find little support for the claim that strengthening intellectual property rights will have any sizable effect on the magnitude of overseas r&d investment by (US) multinationals. Any semblance of a positive relationship between these two variables vanishes the moment we introduce country fixed effects and time fixed effects into the regressions. One implication of our results is, that ceteris paribus, stronger intellectual property rights in the developing countries pursuant to the TRIPs agreement may not have any significant influence on technology transfer into these countries via overseas r&d