"Foreign Direct Investment and Collective Intellectual Property Protection in Developing Countries" - Journal of Economic Behavior & Organization, 149: 389-412, 2018.
Abstract: This paper analyzes spillovers associated with intellectual property rights (IPRs) in developing countries, and investigates how these spillovers influence the desirability of IPRs reform. I provide evidence that foreign direct investment (FDI) flows into a developing country are positively associated with IPRs in that country, as well as IPRs in adjacent developing countries. This finding suggests the presence of multilateral effects related to IPRs that existing analyses do not account for. I develop a general equilibrium international product cycle model to accommodate these effects, and use the empirical sample to calibrate the model. I find that the short-run benefits of unilateral IPRs reform spills over to neighboring countries, creating an individual incentive to maintain weak IPRs. However, reciprocal IPRs reform improves welfare among all reforming countries. I argue that this finding suggests a novel justification of international IPRs agreements among developing countries; by preventing free-riding behavior, these agreements allow mutual benefit through collective policy action.
"Complementarity in Public and Private Intellectual Property Enforcement; Implications for Product Quality"
Abstract: I examine the relationship between publicly provided enforcement of intellectual property (IP) rights and an authentic producer's strategies to influence entry of non-deceptive counterfeit products. I consider investment in supplemental private IP enforcement, as well as endogenous quality of both the authentic and counterfeit product. In this context, I show that the authentic product's quality is non-monotonic in public IP enforcement. When public IP enforcement is low, the authentic firm optimally accommodates counterfeit entry by choosing low private enforcement and relatively high product quality. However, under high public enforcement, the firm deters entry through high private enforcement and a reduction in quality. This relationship creates a non-monotonic relationship between public enforcement and social welfare, and an inefficiently low level of enforcement in equilibrium. I highlight the policy implications of this equilibrium inefficiency.
"Establishment Productivity Convergence and the Effect of Foreign Ownership at the Frontier"
Abstract: I estimate establishment level total factor productivity (TFP) convergence using panel data from India's manufacturing sector from 2001-2015. I examine the presence of foreign owned establishments within each industry's productivity frontier, and allow for the speed of productivity convergence to differ based on the ownership composition of the frontier. While I find statistically and quantitatively significant overall conditional convergence to the frontier, I show that convergence to the foreign owned component of the frontier is markedly slower, suggesting differences in the nature of technology transfer from highly productive domestic and foreign firms. I argue my general approach reconciles the previously disconnected findings of negligible spillovers from foreign direct investment in developing countries, despite evidence of positive productivity convergence and the substantial presence of foreign firms in the productivity frontier.