Intellectual property rights and the upgrading of the global value chain status

Abstract

The present paper explores how intellectual property rights (IPR) protection affects an economy’s status in global value chains (GVC) by introducing IPR protection into the sequential production model. We find that a suitable IPR protection system that matches the phase of economic and technological development a country has reached is the key for developing countries to upgrade their status in GVC, which are dominated by multinational firms from developed countries. Empirical analysis with multinational panel data for 55 countries from 2005 to 2015 provides evidence in support of the predictions of this model, although the GVC‐enhancing effects of IPR protection are heterogeneous for developing and developed countries. The empirical conclusions are robust after using the instrumental variable method and controlling for endogeneity.

A journey toward global value chain upgrading: Exploring the transition from backward to forward integration

“…Sustainable learning requires domestic investment in a knowledge infrastructure that can effectively translate external knowledge into domestic technological capabilities (Mehta, 2022). Similarly, the ability to develop an effective protection of intellectual property rights can help the country to improve its status within the value chain by removing fears of technologically superior GVC members over strategic intangible asset infringement (Yang et al, 2020). The quality of the institutional framework, innovation system and protection of intellectual property rights become particularly relevant in situations where upgrading by backward GVCs no longer yields substantial gains (McDermott and Pietrobelli, 2017) (Cirera and Maloney, 2017), forcing countries to shift to forward GVCs (Lee, 2019).…”

Designing benefit distribution driven innovation strategy for local enterprises under the global value chain system

“…Lee et al (2018) argued that building a local innovation system is a way forward to upgrade the status of the global value chain system. Yang et al (2020) pointed out that developing countries can only improve their position in the global value chain if they independently innovate and establish a sound intellectual property protection system. Park and Gachukia (2020) believed that the construction of local institutions and innovation systems has a positive effect on the upgrading of the global value chains of enterprises.…”

What motivates Vietnamese enterprises to upgrade in global value chains? Closing the intention-behavior gap

“…The complexity of those networks depends on how the production process is unbundled to specific tasks at different stages (Gestrin, 2013;Ryan et al, 2020). Each stage may contribute to the GVCs at different values so that the GVC participants are motivated to perform new activities in the chains with higher value-added for better profitability and stronger competitiveness (Kadarusman and Nadvi, 2013;Yang et al, 2020). This move is known as GVC upgrading that requires more intensive use of either technology, capital, or competencies (Barrientos et al, 2011;Cattaneo et al, 2013;Ryan et al, 2020).…”

“…Correspondingly, whether a firm could leverage the knowledge flows within and outside of GVC and combine its own dynamic and technological capabilities with a high degree of involvement in the knowledge management process for significant innovation will decide its ability to move up in GVCs (Gehl Sampath and Vallejo, 2018;Ryan et al, 2020;Scuotto et al, 2020). Moreover, the innovation activities among the business community will be better encouraged by effective intellectual property rights protection that, in turn, facilitates an economy to upgrade in GVCs (Yang et al, 2020). However, based on the broad concept of entrepreneurship (Kuratko and Audretsch, 2009;Shepherd et al, 2019;Venkataraman, 1997), we argue that GVC upgrading could be considered as an entrepreneurial behavior that demonstrates the process of discovery, evaluation and exploitation of opportunities to move up in the GVCs to provide more valuable outputs that satisfy either the needs of other members in the GVCs or the firms' own needs of profit maximization.…”

“…, 2020). Moreover, the innovation activities among the business community will be better encouraged by effective intellectual property rights protection that, in turn, facilitates an economy to upgrade in GVCs (Yang et al , 2020). However, based on the broad concept of entrepreneurship (Kuratko and Audretsch, 2009; Shepherd et al.…”