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This paper analyzes how exports and foreign direct investment (FDI) differ in affecting the intellectual property rights (IPR) policy of an importing country faced with domestic counterfeiting problems. We identify the circumstances in which IPR protection and private protection are complementary. Our study also highlights the challenges of using IPR protection to fight counterfeiting while attracting FDI, which may reduce domestic welfare.
Chang et al. (Mon,) studied this question.
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