Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/89766
Authors: 
Naghavi, Alireza
Spies, Julia
Toubal, Farid
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper 4430
Abstract: 
This paper studies how the Intellectual Property Right (IPR) regime in destination countries influences the way multinationals structure the international organization of their production. In particular, we explore how multinationals divide tasks of different complexities across countries with different levels of IPR protection. The analysis studies the decision of firms between procurement from related parties and from independents suppliers at the product level. It also breaks down outsourcing into two types by distinguishing whether or not they involve technology sharing between the two parties. We combine data from a French firm-level survey on the mode choice for each transaction with a newly developed complexity measure at the product level. Our results confirm that firms are generally reluctant to source highly complex goods from outside firm boundaries. By studying the interaction between product complexity and the IPR protection, we obtain that (i) for technology-sharing-outsourcing IPRs promote outsourcing of more complex goods to a destination country by guaranteeing the protection of their technology, (ii) for non-technology-related-outsourcing IPRs attract the outsourcing of less complex products that are more prone to reverse engineering and simpler to decodify and imitate.
Subjects: 
outsourcing
product complexity
intellectual property rights
technology sharing
JEL: 
F12
F23
O34
Document Type: 
Working Paper

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