Intellectual Property Rights and the productivity effects of MNE affiliates on host-country firms

In this paper we investigate the impact of increased Intellectual Property Rights (IPR) protection on the productivity effects that MNE affiliates exert on local host-country firms. Conceptually, we argue that IPR protection has two opposing effects: On the one hand, it weakens the productivity effects through reduced knowledge spillovers and increased monopoly power of MNE affiliates. On the other hand, it strengthens productivity effects...