The impact of stronger intellectual property rights on United States multinational firms' decisions to invest, license, and export

This dissertation examines the relationship between a country's regime of intellectual property rights (IPRs) and the technology transfer decisions made by U.S. multinational firms. Here, technology transfer refers to licensing, exports, and foreign direct investment. Motivated by the World Trade Organization's Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement, which mandated that all member countries strengthen their IPRs, my overarching goal is to investigate the channels through which this policy change will affect firms' chosen modes of technology transfer.; The first chapter discusses IPRs and their relationship with multinational firms' activities abroad. Here, I also discuss the literature to date---both theoretical papers and empirical studies.; The second chapter examines the research problem using a country-level approach. Using data on U.S. firms' activities in 50 countries over 1989, 1994, and 1999, I estimate a bilateral trade model where the dollar values of exports, licensing, and FDI are regressed on IPR strength and other macro variables. I find that, ceteris paribus, stronger patent protection causes MNCs to increase licensing and FDI while the effect on exports is ambiguous. A key contribution of this paper is the unique index of IPR strength that I construct for a cross-section of developing and developed countries, and which I subsequently employ in my regressions. This index is then separated into its three underlying factors---readily translatable to enforcement, transparency of regulatory system, and patent system infrastructure. While enforcement and infrastructure are found to be significant for licensing, the regulatory system is the most important factor for U.S. FDI abroad.; Finally, the third chapter extends the investigation through an industry level analysis. Using data on counts of U.S. multinational firms' licensing and FDI activity abroad, I find that the sensitivity of these modes to IPR changes depends on the nature of the industry in question. After accounting for the particular characteristics of different manufacturing industries, I find strong evidence that FDI increases with IPRs, regardless of technology type. Moreover, the important determinant in firms' FDI and licensing decisions is the degree of transparency of a host country's regulatory system.