Intellectual property rights and NorthSouth joint ventures

We study the e§ect of the intellectual property rights (IPR) regime of a host country (South) on a multinationalís decision between serving a market via greenÖeld foreign direct investment to avoid the exposure of its technology or a North-South joint venture (JV) with a local Örm, which allows R&D spillovers under imperfect IPRs. JV is the equilibrium market structure when R&D intensity is moderate and IPRs strong. The South can gain from increased IPR protection by encouraging a JV, whereas policies to limit foreign ownership in a JV gain importance in technology intensive industries as complementary policies to strong IPRs.