Intellectual Property Rights and Foreign Technology Adoption in Developing Countries: An Empirical Investigation

Abstract

The paper addresses the question of whether expanded and strengthened protection of IPRs fosters technology transfer to developing countries, which is one of the premises at the basis of the TRIPS Agreement. Cross-sectional analysis of firms operating in 43 developing countries indicates that stronger IPRs facilitate technology transfer only for firms operating in newly industrialized countries and transition economies. For firms operating in developing and least-developed countries, IP protection is an insignificant determinant of technology licensing. In addition, the results show that firm characteristics such as size, foreign ownership, and sales composition are strong predictors of technology licensing status.