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<p>This study proposes a North-South theoretical model where a Northern multinational firm offshores innovation to the South to increase the chances of successful product creation. This Northern firm risks information leakages when offshoring in the weak IPR-environment of the Southern region. The Northern firm can lobby the Southern government to increase IPR-protection on its product. The government of the South then sets its IPR policy to maximize Northern firm contributions and Southern welfare. A Northern firm that is productive in research engages in more offshoring of R&amp;D to the South and is more likely to lobby for IPR reform. When other channels exist to protect an innovation, such as trade secrets, the Northern firm both offshores and lobbies more. Finally, a Southern government that is willing to change policy in exchange for cash transfers will benefit the South by providing more opportunities for the Southern firm to imitate products; however, large amounts of corruption result in less lobbying and a decrease in Southern welfare.</p>

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Lobbying for IPR-Protection in North-South Trade with R&D Offshoring

  • 期刊论文

  • 发表日期：

    2025年6月27日

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  • Zachary Cohle

摘要

This study proposes a North-South theoretical model where a Northern multinational firm offshores innovation to the South to increase the chances of successful product creation. This Northern firm risks information leakages when offshoring in the weak IPR-environment of the Southern region. The Northern firm can lobby the Southern government to increase IPR-protection on its product. The government of the South then sets its IPR policy to maximize Northern firm contributions and Southern welfare. A Northern firm that is productive in research engages in more offshoring of R&D to the South and is more likely to lobby for IPR reform. When other channels exist to protect an innovation, such as trade secrets, the Northern firm both offshores and lobbies more. Finally, a Southern government that is willing to change policy in exchange for cash transfers will benefit the South by providing more opportunities for the Southern firm to imitate products; however, large amounts of corruption result in less lobbying and a decrease in Southern welfare.