Intellectual Property Rights, Non-market Considerations and Foreign R&D Investments

Joao Albino Pimentel*, Pierre Dussauge, Omar El Nayal

*Corresponding author for this work

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Abstract

Prior research has focused on how firms use a variety of organizational mechanisms to protect their R&D in-vestments from misappropriation risks in foreign countries. Little is known, however, about how firms can rely on non-market factors to induce preferential treatment by host government authorities, thereby protecting their intellectual property overseas. In this paper, we investigate two such non-market factors, one at the country level, the other at the firm level, that are likely to influence the choice of where firms locate their innovation activities: host country inclination towards the firm’s home country and the firm’s political capabilities, respectively. We thus examine how IPR policies and non-market factors interact in protecting firm innovation from misappropriation and in making countries more attractive for innovation-related activities. We find support for our predictions in a sample of 1,341 foreign R&D investments made by 163 firms from 14 home countries over the period 2003–2016.
Original languageEnglish
Article number104442
JournalResearch Policy
Volume51
Issue number2
Number of pages18
ISSN0048-7333
DOIs
Publication statusPublished - Mar 2022

Bibliographical note

Published online: 30 November 2021.

Keywords

  • Intellectual property rights
  • Foreign R&D investments
  • Political capabilities
  • Intercountry perceptions
  • Innovation policy

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