FDI Spillovers and Intellectual Property Rights

Kiyoshi Matsubara
2011 Social Science Research Network  
This paper extends Symeonidis (2003) 's duopoly model with product differentiation to discusses how FDI spillovers that decreases the quality difference between vertically differentiated products of the home and foreign firms affects the home firm's decision on plant location. This paper shows that whether the degree of spillover is exogenous or endogenous, it may have a positive relationship with a unit trade cost including the tariff rate. It also shows that in an oligopoly model with two
more » ... model with two home firms, FDI is more likely than the duopoly case. The hypothesis in the duopoly model is supported by the cross-country regression over 41 developing/emerging economies. JEL Classification: F12, F23, O33.
doi:10.2139/ssrn.1869440 fatcat:myjdj57jbffr3hnwfg4rpilg3u