Impacts of intellectual property protection and its corresponding technology strategy

Abstract

First, this study deals with the issues of impact of intellectual property protection (IPP) policy in developing countries from a technology acquisition perspective. It considers each firm``s effectiveness and efficiency of technology acquisition as intervening agents in assessing the relationship between each firm``s technological capability and the net impact of IPP policy on the growth of firms in developing countries. An empirical analysis has been conducted to test the above relationship using daily data on the firm``s rate of return in various industries in Korean stock market. The results showed that changes in Korean IPP policy, in the short run, have created a stock loss for most of firms but a gain for some, namely, those with more technological capability. In addition, it was found that, in the short run, technological selection and learning capability play more important roles than does technology generation capability in determining whether the firm generates a favourable or unfavourable impact from a change in IPP policy in developing countries. It is concluded with a policy recommendation that the contingent approach with technological capability should be taken in formulating a sound IPP policy in developing countries. Second, the study highlights main features of technology transfer between developing countries with different types of technology acquisition in an analytical nexus. A paradigm is formulated to show mutual benefits, the scope, and the mechanisms for such a transfer using example of telecommunications in Korea and China. Based on the case study, policy recommendations are posited to enforce the technology transfer and optimize the mutual benefits.