Chapter 11: National IPR Policies and Multinational R & D Strategies: An Interactive Perspective
11. National IPR policies and multinational R&D strategies: an interactive perspective Minyuan Zhao and Bernard Yeung INTRODUCTION TRIPs, the Agreement on Trade-Related Aspects of Intellectual Property Rights administered by WTO, has prompted extensive discussions on the optimal international IPR arrangement and its enforcement. For developing countries eager to speed up their technological progress, how strictly should they enforce the protection of IPR? Developing countries often argue that they need the time and freedom to learn from the advanced countries and nurture their indigenous industries. The experiences of the United States in the nineteenth century and Japan in the twentieth century are cited as examples of the imitate-ﬁrst-innovate-later policy. The Commission on Intellectual Property Rights (2002),1 for example, observed that ‘there has generally been an association with “weak” rather than “strong” forms of IP protection in the formative period of economic development’. Meanwhile, endogenous growth models in economics suggest that a strong IPR regime is crucial to R&D investment and economic growth (Romer, 1990). This view is echoed by Ambassador Susan Schwab, the US Trade Representative, in a recent news conference: ‘Any country that aspires to be a knowledge-based economy, to promote its entrepreneurial and artistic classes sees the value of protecting intellectual property.’ In particular, weak IPR protection may keep away valuable foreign direct investments (Lai, 1998; Smith, 2001), especially in technology-intensive sectors that rely heavily on intellectual properties (Smarzynska Javorcik, 2004). A missing piece in the whole debate is the fact that ﬁrms are heterogeneous....
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