Keywords: Research & Development (R&D), Intellectual Property Rights (IPR), Foreign Direct Investments (FDI), Multinational Enterprises (MNEs), Patent protection

“Intellectual Property Rights Protection and Cross-border R&D Investments by Multinational
Enterprises”

The globalisation of Research and Development (R&D) by multinational enterprises (MNEs) has grown significantly in recent years, with emerging economies featuring as major recipients of R&D investments. One serious problem MNEs face in emerging economies is weaker intellectual property rights (IPRs). However, the recent rise of R&D investments in emerging economies is at odds with the previous IPR literature, showing that strengthening IPR protection has positive effects on inward R&D investments by MNEs. This dissertation aims to uncover how MNEs reconcile the needs of local R&D in these countries with great concerns for IP protection there. In order to explain these twin phenomena, we argue that, while weak IPR protection is expected to increase IP hazards associated with foreign R&D activities in general, there are important firm-level (investor-level) and host country-level factors that determine the actual and heterogeneous IP risks that individual R&D investors are confronted with in host countries. Relying on data on cross-border R&D investments and global patent applications of 120 European market leading MNEs, 2003-2014, we examine our expectations regarding this issue. Academic contributions and policy implications of our findings are discussed.