Intensity Of Intellectual Property Rights Protection And Durability Of Joint Ventures Relationship

Protection of intellectual property rights(IPRs)is becoming the most serious issue in the current trade disputes between China and the United States.For a long time,China has acquired advanced technology from foreign investors by establishing joint ventures(JVs),which has been strongly accused of weakening the intensity of protection deliberately by some developed countries with more perfect IPRs protection systems,regarded as damaging to their national and JVs' interests,causing intellectual property disputes and cooperative conflict between both cooperation parties and even leading to termination of JVs relationship.These criticism has become the core issue in the current trade disputes.Based on this background,this paper explores whether the IPRs protection is the key institutional factor affecting the durability of JVs relationship,so as to verify the criticism on technology transfer from the U.S.government.This paper takes the sample of foreign-invested joint ventures in Chinese manufacturing firms' database during 1998-2007.Through statistical analysis,we find that,firstly,there are significant differences in the level of IPRs in different provinces in China,the level of which in eastern regions behaves higher than that in central and western regions on the whole.Secondly,the average probability of termination of JVs relationship is about 1/5,which behavior is more likely to happen in the initial stage of cooperation,especially in the first year.In regression analysis,using Logistic model to explore the impact of intensity of regional IPRs on the probability of termination of JVs relationship,we find that:intensity of IPRs protection is truly the key institutional factor affecting the termination of JVs relationship and JVs are more likely to break up in regions with poor IPRs protection.Meanwhile,this effect of IPRs protection varies in different industries: the impact of IPRs protection is more obvious in industries with high R&D density,that is,stable JVs relationship depends more on the level of regional IPRs protection in this kind of industry.Overcoming the endogenous problem,thedifferential effect result is still robust.Finally,using AFT survival analysis model to examine the effect of IPRs protection on the survival of JVs,we find that: protection of IPRs has a significant positive effect on the survival of JVs relationship,that is,JVs will survive longer if IPRs protection environment is better.Meanwhile,the effect of IPRs protection is stronger in high R&D-density industries.Besides,taking different instances into account such as ownership of JVs,origins of foreign capital,shareholding status,investment motivation and termination types,the core conclusions in this paper are still robust.