Innovation, Startups and Intellectual Property Management

Leon, Ignacio De; Donoso, José Fernández

doi:10.1007/978-3-319-54906-4

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“…This is because Chinese firms could be faced with potentially heavy costs of IP litigation, settlement costs, and a potential prolonged threat of a ban from operating in a host market. The average cost of patent litigation is estimated to be in the region of $2.8 million and the average disruption that firms face due to IP litigation is found to be between 18 and 36 months (De Leon & Donoso, 2017). For example, firms sued for patent infringement in Germany experienced negative effects on their performance, irrespective of settling or losing a patent trial (Schliessler, 2015).…”

Section: Theoretical Background and Hypothesesmentioning

confidence: 99%

The Effect of European Intellectual Property Institutions on Chinese Outward Foreign Direct Investment

Papageorgiadis

Alexiou

2019

Manag. Organ. Rev.

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This study examines the role of the strength of the Intellectual Property (IP) institutions of 23 European countries in attracting Chinese Outward Foreign Direct Investment (OFDI) during the time period 2003–2015. Following a dynamic panel data analysis methodology, we find that the strength of IP institutions has a positive effect in attracting higher levels of OFDI from China. This is an important finding for the OFDI literature from emerging markets, since previous studies have researched this relationship from the OFDI perspective of developed countries. However, we also find a weak indication of a potential U-shaped relationship between the strength of IP institutions and Chinese OFDI. To better understand this relationship, we interact a European country's membership in the Former Eastern Bloc (FEB) with the strength of IP institutions and find a negative moderating effect. We therefore find that when investing in FEB countries, Chinese firms are attracted to weaker levels of IP institutional strength. The results of this study have important implications for future studies on the determinants of OFDI from emerging markets, as well as for European and Chinese businesses and policy-makers concerning the importance of IP institutional strength.

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Section: Theoretical Background and Hypothesesmentioning

confidence: 99%