Intellectual Property Protection To Attract Fdi And Host Country Innovation

The global system of intellectual property rights (IPRs) is changing profoundly. Many developing countries have undertaken significant strengthening of their IPRs regimes. Most significant is the introduction of the agreement on trade related intellectual property rights, or TRIPs, within the World Trade Organization (WTO). Under TRIPs, WTO members must adopt and enforce strong and nondiscriminatory minimum standards of protection for intellectual property. It is no doubt that strong intellectual property rights would benefit the countries which have lots of intellectual property rights. But the premise of building the global system of intellectual property rights is that the system must also benefits the developing countries. On one side, many policymakers believe that this mandated policy change will work against their national economic interests, transferring rents to multinational corporate patent holders headquartered in the world's most advanced countries, especially the United States. Advocates for strong IPR believe that strengthening IPR will accelerate the transfer of technology between countries, ensuring a relatively equal distribution of gains from this policy change. The general opinion believes that the strong intellectual property rights of the developing countries would bring more technology transfer from the developed countries or multinational corporations. The more technology transfer would promote technology progress and innovation of the developing countries. One of purposes of TRIPS is to promote the global technology transfer. Article 7 of the TRIPS Agreement put forward that the protection of IPR should benefit the global technology transfer and spillover; and Article 66.2 of the TRIPS Agreement also put forward that the developed countries should encourage multinational corporation transfer technology to the developing countries.Actually, most of the developing countries which attending the agreement hope that the agreement could bring more technology transfer. But the negative effect of strong protection of IPR is also significant. The strong protection of IPR would increase the monopoly power of MNES. MNES can earn monopoly profit through the monopoly power, not transfer their advanced technology. At the same time, the strong protection of IPR would restrict the imitation activities of the developing countries, which would hurt the technology progress and imitation innovation of the developing countries.Lots of scholars believe that these low technology countries can promote technology progress throng imitation innovation. In fact, most of the developing countries take FDI as a very important path. Nevertheless, MNES not only consider the effect of cutting the cost of production, but also consider the risk of imitation from the local corporation in the host countries. Based on the reasons, the policy of IPR protection of host countries would affect the technology transfer decision of MNES. From above the fact, we could deduce that the policy of IPR protection would affect whether it is success of the strategy of FDI in the developing countries. So, as to the developing countries, how to perform the IPR protection is a very important problem.Based on the background, this thesis aims to analyses theoretically and empirically the relationship among intellectual property rights protection, FDI and the innovation of the host countries. The analysis tries to clear the effects of IPR protection to the machines of innovation-inducing effect of FDI and some relative factors. It is believe that the thesis would provide some theoretical and empirical evidence. In this paper, the main contents of the chapters are as follows:Chapter 1 is the introduction that explains the background, purpose, significance, study method, logic structure, the innovation and the inadequate of this thesis.Chapter 2 introduces generally the historical development, characteristics and the fact evidences of China' FDI, intellectual property protection and innovation.Chapter 3 introduces the basis theory of intellectual property, FDI and innovation. The chapter is composed of two parts: basis theory review and specific framework for theoretical analysis. The basis theory review introduces mainly the classical theory about intellectual property, FDI and innovation. While the specific framework for theoretical analysis introduces several relative specific analysis models from the view of constructing model.Chapter 4 is the study of theory in the thesis. Based on North-South product model and game theory model, the chapter discusses the role of intellectual property protection in three machines of innovation-inducing effect of FDI. Generally speaking, theory models show that the machines would be impacted by the level of intellectual property rights protection of host country and the impact is not monotonic linearity, but nonlinearity.Chapter 5 is empirical analysis of the thesis. The empirical analyses test the theory deduction of chapter 4. But the analyses also consider some very important factors which are not included in the theory study of chapter 4. This would be favor of the discussion of the relationship among intellectual property, FDI and innovation of host countries. Based on 90 countries statistics data, the US' FDI statistics data and the industry statistics data of China, the thesis tests the relationship among the three factors. General speaking, the results show that the evidences support the deduction of chapter 4. And the studies also found that the effect of intellectual property protection to innovation-induced by FDI would be impacted no-linearly by the development phase of host countries, the characters of host countries and the industry features of FDI.Chapter 6 is the conclusions and suggestions of the thesis. In the chapter, I summary firstly the main conclusions of the full paper; then I try to put forward to some suggestions on the basis of the development phase and the development features of China.