Entry, reputation and intellectual property rights protection

Jiahua CHE, Larry D. QIU*, Wen ZHOU

*Corresponding author for this work

Research output: Journal PublicationsJournal Article (refereed)

2 Citations (Scopus)

Abstract

We examine how reputation concerns induce a multinational to partly withhold its entry into a developing country under weak intellectual property rights (IPR) enforcement. Equilibrium IPR violations are shown to arise only in the presence of such concerns. Holding constant a multinational's incentive to innovate, better IPR enforcement encourages entry but reduces social welfare. The multinational's incentive to innovate may be inversely Ushaped in the strength of IPR enforcement. If timed properly, however, stronger IPR enforcement can foster innovation without compromising social welfare. Testable implications concerning observable IPR violations are derived.
Original languageEnglish
Pages (from-to)1256-1281
Number of pages26
JournalCanadian Journal of Economics
Volume47
Issue number4
DOIs
Publication statusPublished - Nov 2014
Externally publishedYes

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