Essays on intellectual property rights, innovation, and technology transfer

This thesis investigates theoretically and empirically the relationship between intellectual property rights, innovation, and international technology transfers. The objective is to understand how intellectual property rights affect firms' choices of innovative activities and of entry modes in international markets, as well as what determines intellectual property rights policies across countries.; Chapter two of the thesis develops a theoretical model that explores a developing country's trade-off between facilitating the imitation of foreign technologies and encouraging domestic innovative activities in its choice of intellectual property rights (IPR). It is shown that innovations in a developing country increase in its IPR, and a country's optimal IPR depend on its development level possibly in a non-monotonic way. The empirical evidence confirms the positive impact of IPR on innovations in developing countries, and suggests the presence of a U-shaped relationship between IPR and economic development.; Chapter three of the thesis studies the relationship between IPR and the entry modes by multinational firms. A model is developed allowing multinational firms to choose among the three modes of entry: export, foreign direct investment (FDI), and licensing. Using the multinomial logit regression model, it is shown that while stronger IPR increases total entries by US multinational firms, it increases the probabilities of entries through FDI and licensing. Unlike the findings in the literature, increases in IPR impact positively on FDI more than on licensing. However, this internalization incentive is reduced in high R&D industries where imitation may become more difficult.; Chapter four extends chapter three to study how and to what extent the entry mode decisions are sensitive to national differences in the level of development and threat-of-imitation. Countries are separated into two groups of level of development: high and low, and three threat-of-imitation groups: high threat, moderate threat, and low threat countries. The analysis shows that an increase in IPR leads to an increase in the probability of choosing FDI more than that of licensing. In other words, firms prefer to internalize their knowledge by engaging in FDI activity. However, this internalization incentive is diminished in the low development countries or countries that pose a low threat-of-imitation.