Date of Award

Spring 2010

Document Type


Degree Name

Doctor of Philosophy (PhD)



First Advisor

Keith E. Maskus

Second Advisor

Robert McNown

Third Advisor

Yongmin Chen


This thesis discusses three independent topics related to parallel trade and the nexus between intellectual property rights (IPRs) protection and the mode of foreign direct investment (FDI). A simple model and a numerical example are demonstrated in chapter 2 to show that even though parallel imports (PI) may reduce IPR holder’s incentive in investing in brand marketing due to free rider problem, investment in service will increase as a response to PI since service is excludable and it helps mitigate price competition by achieving product differentiation. In chapter 3, I investigate the impact of software piracy and PI in the video game market. Three interesting results are obtained. First, the software provider and the hardware manufacturer could both benefit from software piracy. Second, the hardware manufacturer may benefit from parallel imports (PI). Third, the consumers in the PI recipient country are not necessarily better off due to PI. Chapter 4 is an empirical study that discusses how IPR regime affects multinational firms’ ownership structure (joint venture or wholly owned subsidiaries) in the foreign market. By analyzing a firm-level panel data set from Taiwanese manufacturing multinational enterprises for the period 2003 to 2005, I find that Taiwanese manufacturing multinational firms are more likely to choose joint ventures if IPR protection in the FDI host country is strong. The estimation results suggest that one unit increase in IPR protection in the average country raises the probability of joint ventures by 13.5 percent. I also find that MNEs prefer wholly owned subsidiaries to joint ventures in host countries with large markets and high factor price as well as high average income.

Included in

Economics Commons