Intellectual property rights protection and R&D offshoring: evidence from Taiwan

This paper investigates the nexus between intellectual property rights (IPRs) protection and research and development (R&D) offshoring by employing data from Taiwanese multinational enterprises (MNEs) for the period 2003-2005. The empirical results suggest that if a country with IPR protection strength equal to that in Chile increases its IPR protection to the level similar to Taiwan, then the Taiwanese MNEs' likelihood of R&D offshoring to that country will reduce by 2.1%. This result lends support to the prediction of Gersbach and Schmutzler (2011, Oxford Economic Papers 63(1)).