Towards integrating country- and firm-level perspectives on intellectual property rights

Abstract

Intellectual property rights (IPRs) are of critical importance in international business. The implications for firm strategy and for policymakers are rarely aligned because the optimal level of IPR protection can be quite different from the country-and the firm-level perspectives. There is considerable heterogeneity in firm strategies, the spatial distribution of their innovation activities, and their IPR portfolios. There is still greater variation between countries, their IPR legislation and enforcement efforts, as well as their industrial and development policies. For firms, sustaining firm-specific advantages (FSAs) depends on their ability to create and extract rent from their knowledge assets, and this involves deliberate interfirm cooperation, careful location choices, and talent recruitment and retention. At the country level, the attractiveness of countries for MNEs is shaped by the provision of country-specific advantages such as IPR protection and its effective enforcement, but the kinds of IPR regimes that are optimal to attract inward investment can be disadvantageous for building domestic firm capacity, and vice-versa. Although firm IPR strategies and IPR regimes are clearly interlinked, the literature integrating across these two levels has been underdeveloped, and we propose a framework to guide future research.