The Geographical Boundaries for the Exhaustion Principle of Intellectual Property Rights, Parallel Trade and Foreign Direct Investment

Year 2018, Volume: 18 Issue: 38, 23 - 46, 30.11.2018

Onur A. Koska

https://doi.org/10.25294/auiibfd.492737

Abstract

This study’s main
motivation is to review the trade literature on the implications that trade-integrated
countries may adopt different geographical boundaries for the exhaustion of
intellectual property rights (national, international, regional), and to discuss
potential gaps in the literature. The main argument is that a policy change in such
geographical boundaries will have important implications on (i) retailers’ parallel
trade decisions, (ii) manufacturers’ strategic market behavior and foreign
direct investment decisions, and (iii) countries’ welfare (consumer surplus and
firms’ profits). Also this study would like to introduce this topic to the
Turkish economics literature.

Keywords

Exhaustion of Intellectual Property Rights, Parallel Trade, Foreign Direct Investment, Social Welfare

Hakların Tükenmesi İlkesinin Coğrafi Sınırları, Paralel Ticaret ve Doğrudan Yabancı Yatırımlar

Abstract

Bu çalışmanın temel motivasyonu,
uluslararası ticaret yoluyla birbirine entegre olmuş ülkelerde, fikri mülkiyet
haklarının tükenmesi ilkesinin farklı coğrafi sınırlara (ülkesel, uluslararası
veya bölgesel) tâbi olmasını uluslararası ticaret yazını çerçevesinde ele almak
ve ilgili yazındaki eksiklikleri tartışmaktır. Çalışmanın temel argümanı, hakların
tükenmesi ilkesinin coğrafi sınırlarında gerçekleştirilecek bir politika değişikliğinin (i) perakendecilerin paralel
ticaret kararları, (ii) üretici firmaların stratejik piyasa davranışları ve doğrudan yabancı yatırım kararları ile
(iii) ülkelerin sosyal refahı (tüketici artığı ve firma kârları) üzerinde önemli etkiler
yaratacağıdır. Ayrıca bu çalışma özellikle kuramsal modeller ve analitik
çözümlemeler çerçevesinde Türkçe iktisat yazınında henüz yer almayan bu konuya
dikkat çekmeyi amaçlar.

Keywords

Fikri Mülkiyet Haklarının Tükenmesi, Paralel Ticaret, Doğrudan Yabancı Yatırımlar, Sosyal Refah

References

• Altomonte, C., Rungi A. 2014. Global supply chains and international competitiveness. Robert Schuman Centre for Advanced Studies Policy Paper 2014/04, European University Institute. 

• Bevan, A.A., Estrin, S. 2004. The determinants of foreign direct investment into European transition economies. Journal of Comparative Economics 32(4): 775-787. 

• Brainard, S.L. 1993. A simple theory of multinational corporations and trade with a trade-off between proximity and concentration. NBER Working Paper. No. 4269. Cambridge: National Bureau of Economic Research. 

• Brainard, S.L. 1997. An empirical assessment of the proximity-concentration trade-off between multinational sales and trade. American Economic Review 87(4): 520-544. 

• Bulow, J., Geanakoplos, J., Klemperer, P. 1985. Multimarket oligopoly: strategic substitutes and complements. Journal of Political Economy 93(3): 488-511. 

• Cespedes, F.V., Corey, E.R., Rangan, V.K. 1988. Gray markets: causes and cures. Harvard Business Review (July 1988 Issue): 75-82.
• Chaney, T. 2018. The gravity equation in international trade: an explanation. Journal of Political Economy 126(1): 150-177.
• Chen, Y., Maskus, K.E. 2005. Vertical pricing and parallel imports. Journal of International Trade and Economic Development 14(1): 1-18. 

• Dış Ekonomik İlişkiler Kurulu Raporu (DEİK). 2011. Dış ekonomik ilişkilerde güncel konular. İstanbul: DEİK. 

• Dunning, J.H. 1992. Multinational enterprises and the global economy. Wokingham: Addison- Wesley. 

• Eatwell, J. 1996. International capital liberalization: the impact on world development. CEPA Working Paper Series I. No. 1. New York: New School University. 

• Ganslandt, M., Maskus, K.E. 2004. Parallel imports and the pricing of pharmaceutical products: evidence from the European Union. Journal of Health Economics 23(5): 1035-1057.
• Ganslandt, M., Maskus, K.E. 2007. Vertical distribution, parallel trade, and price divergence in integrated markets. European Economic Review 51(4): 943-970. 

• Ganslandt, M., Maskus, K.E. 2008. Intellectual property rights, parallel imports and strategic behavior. In K.E.Maskus (Ed.), Intellectual Property, Growth and Trade, pp. 263-288, Amsterdam: Elsevier-North Holland. 

• Goodman, J.B., Pauly, L.W. 1993. The obsolescence of capital controls? Economic management in an age of global markets. World Politics 46(1): 50-82. 

• Grossman, G.M., Lai, E.L-C. 2008. Parallel imports and price controls. RAND Journal of Economics 39(2): 378-402. 

• Gundlach, E., Nunnenkamp, P. 1998. Some consequences of globalization for developing countries. In J. H. Dunning (Ed.), Globalization, Trade, and Foreign Direct Investment, pp. 153-174, Amsterdam: Elsevier. 

• Helpman, E. 1984. A simple theory of international trade with multinational corporations. Journal of Political Economy 92(3): 451-472. 

• Helpman, E., Krugman, P.R. 1985. Market structure and foreign trade. Cambridge: The MIT Press. 

• Hirst, P. 1997. The global economy – myths and realities. International Affairs 73(3): 409-425. 

• Horstmann, I.J., Markusen, J.R. 1996. Exploring new markets: direct investment, contractual relations and the multinational enterprise. International Economic Review 37(1): 1-19. 

• Hwang, H., Peng, C-H., Shih, P-C. 2014. Parallel imports, product innovation and market structures. International Review of Economics and Finance 34(1): 237-245. 

• Kayhan, F. 2001. Türk hukuku açısından paralel ithalat ve marka hakkının tükenmesi. FMR Ankara Barosu Fikrî Mülkiyet ve Rekabet Hukuku Dergisi 2001(1): 51-72. 

• Knox, D., Richardson, M. 2002. Trade policy and parallel imports. European Journal of Political Economy 19(1): 133-151. 

• Koska, O.A. 2011. Çok uluslu şirketler hakkında bil(me)diklerimiz. In H.Mıhçı (Ed.), İktisada 
Dokunmak, pp. 229-243, Ankara: Phoenix Publishing. 

• Koska, O.A. 2015. A model of competition between multinationals. METU Studies in Development 42(2):271-298.
• Koska, O.A. 2018a. A consumer-surplus standard in foreign acquisitions, foreign Direct Investment, and welfare. Review of World Economics. https://doi.org/10.1007/s10290-018-0324-6
• Koska, O.A. 2018b. Gains from Multinational Competition for Cross-Border Firm Acquisition. (Economics Discussion Papers, No 2018-19). Kiel Institute for the World Economy (IfW).
• Koska, O.A., Long, N.V., Staehler, F. 2018. Foreign direct investment as a signal. Review of International Economics 26(1): 60-83.
• Koska, O.A., Staehler, F. 2014a. Trade and imperfect competition in general equilibrium. Journal of International Economics 94(1): 157-168. 

• Koska, O.A., Staehler, F. 2014b. Optimal acquisition strategies in unknown territories. Journal of Institutional and Theoretical Economics 170(3): 406-426. 

• Koska, O.A., Staehler, F. 2015. Factor price differences in a general equilibrium model of trade and imperfect competition. Research in Economics 69(2): 248-259. 

• Li, C. 2006. Competition, parallel imports and cost-reducing innovation. Scottish Journal of Political Economy 53(3): 377-397. 

• Li, C., Maskus, K.E. 2006. The impact of parallel imports on investments in cost-reducing research and development. Journal of International Economics 68(2): 443-455. 

• Li, C., Robles, J. 2007. Product innovation and parallel trade. International Journal of Industrial Organization 25(2): 417-429. 

• Long, D.E. 2002. “Unitorrial” marks and the global economy. John Marshall Review of Intellectual Property Law 1(191): 191-217. 

• Lewis, A.W. 1968. World trade since the war. Proceedings of the American Philosophical Society 112(6): 362-366. 

• Maddison, A. 2001. The world economy: a millenial perspective. Paris: Organisation for Economic Co-operation and Development. 

• Malueg, D.A., Schwartz, M. 1994. Parallel imports, demand dispersion, and international price discrimination. Journal of International Economics 37(3): 167-195. 

• Markusen, J.R. 1984. Multinationals, multi-plant economies, and the gains from trade. Journal of International Economics16(3): 205-226. 

• Markusen, J. R. 1995. The boundaries of multinational enterprises and the theory of international trade. Journal of Economic Perspectives 9(2): 169-189. 

• Markusen, J.R. 2002. Multinational firms and the theory of international trade. Cambridge: The MIT Press. 

• Mas-Colell, A., Whinston, M.D., Green, J.R. 1995. Microeconomic Theory. New York: Oxford University Press. 

• Maskus, K.E., Chen, Y. 2002. Parallel imports in a model of vertical distribution: theory, evidence, and policy. Pacific Economic Review 7(2): 319-334. 

• Maskus, K.E., Chen, Y. 2004. Vertical price control and parallel imports: theory and evidence. Review of International Economics 12(4): 551-570. 

• Maskus, K.E., Staehler, F. 2014. Retailers as agents and the limits of parallel trade. European Economic Review 70(1): 186-196. 

• Matteucci, G., Reverberi, P. 2014. Parallel trade, product quality, and welfare. Economics Letters 122(2): 258-262. 

• Mıhçı H., Çağatay, S., Koska, O.A. 2011. The determinants of foreign direct investment outflows from the European Union countries. Economics Bulletin 31(3): 2653-2666. 

• Müller-Langer, F. 2012. Parallel trade and its ambiguous effects on global welfare. Review of International Economics 20(1): 177-185. 

• Navaretti, B.G., Venables, A.J. 2004. Multinational firms in the world economy. Princeton: Princeton University Press. 

• Neary, J.P. 2016. International trade in general oligopolistic equilibrium. Review of International Economics 24(4): 669-698.

• Neary, J.P., Tharakan J. 2012. International trade with endogenous mode of competition in general equilibrium. Journal of International Economics 86(1): 118-132. 

• NERA, National Economic Research Associates. 1999. The economic consequences of the choice of regime in the area of trademarks. London: NERA. 

• Pınar, H. 2004. Uluslararası rekabette fikri mülkiyet haklarının önemi ve Türkiye. İstanbul: İstanbul Ticaret Odası. 

• Richardson, M. 2002. An elementary proposition concerning parallel imports. Journal of International Economics 56(1): 233-245. 

• Saggi, K. 2014. Regional exhaustion of intellectual property. International Journal of Economic Theory 10(1): 125-137. 

• Tekdemir, Y. 2003. Marka hakkının tükenmesi ilkesi ve paralel ithalat sorununa iktisadi bir yaklaşım. Rekabet Dergisi 13(1): 3-31.
• Tinbergen, J. 1962. “An Analysis of World Trade Flows”. In Shaping the World Economy. New York: Twentieth Century Fund.

• UNCTAD 2007. World Investment Report 2007: Transnational corporations, extractive industries and development. New York and Geneva: United Nations. 

• UNCTAD 2008. World Investment Report 2008: Transnational corporations and the infrastructure challenge. New York and Geneva: United Nations. 

• UNCTAD 2017. World Investment Report 2017: Investment and the digital economy. New York and Geneva: United Nations. 

• Valletti, T.M. 2006. Differential pricing, parallel trade, and the incentive to invest. Journal of International Economics 70(1): 314-324. 

• Valletti, T.M., Szymanski, S. 2006. Parallel trade, international exhaustion and intellectual rights: a welfare analysis. Journal of Industrial Economics 54(4): 499-526.