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International Business English国际商务英语Lesson 1 International Business第一课国际商务*International business refers to transaction between parties from different countries. Sometimes business across the borders of different customs areas of the same country is also regarded as import and export, such as business between Hong Kong and Taiwan.*International business involves more factors and thus is more complicated than domestic business. The following are some major differences between the two.1). The countries involved often have different legal systems, and one or more parties will have to adjust themselves to operate in compliance with the foreign law.2). Different counties usually use different currencies and the parties concerned will have to decide which currency to use and do everything necessary as regards conversion etc. Uncertainties and even risks are often involved in the use of a foreign currency.3).Cultural differences including language, customs, traditions, religion, value, behaviour etc. often constitute challenges and even traps for people engaged in international business.4). Countries vary in natural and economic conditions and may have different policies towards foreign trade and investment, making international business more complex than domestic business.*With the development of economic globalisation, few people or companies can completely stay away from international business. Some knowledge in this respect is necessary both for the benefit of enterprises and personal advancement.*International business first took the form of commodity trade, i.e. exporting and importing goods produced or manufactured in one country for consumption or resale in another. This form of trade is also referred to as visible trade. Later a different kind of trade in the form of transportation, communication, banking, insurance, consulting, information etc. gradually became more and more important. This type of trade is called invisible trade. Today, the contribution of service industries of the developed countries constitutes over 60% of their gross domestic products and account for an increasing proportion of world trade. *Another important form of international business is supplying capital by residents of one country to another, known as international investments. Such investments can be classified into two categories. The first kindof investments, foreign direct investments or FDI for short is made for returns through controlling the enterprises or assets invested in in a host country.*The host country is a foreign country where the investor operates, while the country where the headquarters of the investor is located is called the home country. The second kind of investment, portfolio investment, refers to purchases of foreign financial assets for a purpose other than controlling. Such financial assets may be stocks, bonds or certificates of deposit.Stocks are also called capital stocks or bonds. Bonds are papers issued by a government or a firm with promise to pay back the money lent or invested together with interest. The maturity period of a bond is at least one year, often longer, for example five, or even ten years. Certificates of deposit generally involve large amounts, say 25 thousand US dollars *Besides trade and investment, international licensing and franchising are sometimes taken as a means of entering a foreign market. In licensing, a firm leases the right to use its intellectual property to a firm in another country. Such intellectual property may be trademarks, brand names, patents, copyrights or technology. Firms choose licensing because they do not have to make cash payments to start business, and can simply receive income in the form of royaltyBesides, they can benefit from locational advantages of foreign operation without any obligations in ownership or management. The use of licensing is particularly encouraged by high customs duty and non-tariff barriers on the part of the host country. However it is not advisable to use licensing in countries with weak intellectual property protection since the licensor may have difficulty in enforcing licensing agreement.*Franchising can be regarded as a special form of licensing. Under franchising, a firm, called the franchisee, is allowed to operate in the name of another, called the franchiser who provides the former with trademarks, brand names, logos, and operating techniques for royalty. In comparison with the relation between the licenser and the licensee, the franchiser has more control over and provides more support for the franchisee.*The franchiser can develop internationally and gain access to useful information about the local market with little risk and cost, and the franchisee can easily get into a business with established products or services. Franchising is fairly popular especially in hotel and restaurant business.*Other forms for participating in international business are management contract, contract manufacturing, and turnkey project.*Under a management contract, one company offers managerial or other specialized services to another within a particular period for a flat payment or a percentage of the relevant business volume. Sometimes bonusesbased on profitability or sales growth are also specified in management contracts.Government policies often have a lot to do with management contracts. When a government forbids foreign ownership in certain industries it considers to be of strategic importance but lacks the expertise for operation, management contracts may be a practical choice enabling a foreign company to operate in the industry without owning the assets*By contract manufacturing, a firm can concentrate on their strongest part in the value chain, e.g. marketing, while contracting with foreign companies for the manufacture of their products. Such firms can reduce the amount of their resources devoted to manufacture and benefit from location advantages from production in host countries. However, loss of control over the production process may give rise to problems in respect of quality and time of delivery.*For an international turnkey project, a firm signs a contract with a foreign purchaser and undertakes all the designing, contracting and facility equipping before handing it over to the latter upon completion. Such projects are often large and complex and take a long period to complete. Payment for a turnkey project may be made at fixed total price or on a cost plus basis. The latter way of payment shifts the burden of possible additional cost over the original budget onto the purchaser *BOT is a popular variant of the turnkey project where B stands for Build, O for operate and T for transfer. For a BOT project, a firm operate a facility for a period of time after building it up before finally transferring it to a foreign company. Making profit from operating the project for a period is the major difference between BOT and the common turnkey project. Needless to say, the contractor has to bear the financial and other risks that may occur in the period of operation.*Some Words and Expressionscustoms area 关税区in compliance with 遵从，遵照conversion n.货币兑换visible trade 有形贸易resale n.转售invisible trade 无形贸易gross domestic product 国内生产总值for short 缩写为account for 占……比例headquarters n.总部trap n.陷阱，圈套portfolio investment 证券投资stocks n.股票bonds n.债券maturity n.（票据等）到期，到期日certificate of deposit 大额存单other than 而不是licensing n.许可经营franchising n.特许经营n.商标advisable adj.可行的，适当的patent n.专利royalty n.专利使用费，许可使用费，版税copyright n.版权licensor n.给予许可的人licensee n.接受许可的人franchiser n.给予特许的人franchisee n.接受特许的人logo n.标识，标记management contract 管理合同expertise n.专门知识bonus n.红利，奖金，津贴flat adj.一律的，无变动的contract manufacturing 承包生产value chain 价值链turnkey project 交钥匙工程BOT(Build, Operate, Transfer）建设，经营，移交Stand for 表示，代表variant n.变形，变体Lesson twoIncome Level and the World Market第二课收入水平和世界市场This lesson discusses the relation between the income level and the market potential, and the features of high income, middle income and low income markets.Special analyses are made on Triad, i.e. the markets of North America,European Union and Japan, as well as other markets that are closely related with China.The first two paragraphs mainly deal with GNP and GDP, two important concepts usedto indicate the total size of an economy. GDP, Gross Domestic Product, stresses the place of production while GNP, Gross National Product, on the ownership of production factors.GDP is used by most countries now where as GNP was more popular before the 1990s. The actual figures of a country’s GNP and GDP are, however, quite similar in most cases and we can use whichever figure that is available.TEXT:In assessing the potential of a market, people often look at its income level since it provides clues about the purchasing power of its residents. The concepts national income and national product have roughly the same value and can be used interchangeably if our interest is in their sum total which is measured as the market value of the total output of goods and services of an economy in a given period, usually a year. The differenceis only in their emphasis. The former stresses the income generated by turning out the products while the latter, the value of the product s themselves. Gross National Product, GNP, and Gross Domestic Product, GDP, are two important concepts used to indicate a country’s total income. GNP refers to the market value of goods and services produced by the property and labor owned by the residents of an economy. This term was used by most governments before the 1990s国民生产总值(GNP)是最重要的宏观经济指标,它是指一个国家地区的国民经济在一定时期（一般1年）内以货币表现的全部最终产品（含货物和服务）价值的总和。
中考英语知识产权保护单选题40题1.Respecting intellectual property rights is important because it encourages _____.A.creativityzinessC.dishonestyD.neglect答案：A。
本题考查对知识产权保护重要性的理解。
尊重知识产权能鼓励创造力，A 选项creativity 正确。
B 选项laziness 懒惰，与知识产权保护无关；C 选项dishonesty 不诚实，知识产权保护并非鼓励不诚实；D 选项neglect 忽视，与知识产权保护的目的相悖。
2.In school, we should not copy others' homework as it violates _____.A.intellectual property rightsB.friendshipC.health rulesD.sports spirit答案：A。
在学校抄别人作业违反了知识产权，A 选项正确。
B 选项friendship 友谊，抄作业与友谊无关；C 选项health rules 健康规则，不涉及健康问题；D 选项sports spirit 体育精神，与抄作业不相关。
3.Protecting intellectual property rights helps to promote _____.A.confusionB.progressC.regressionD.destruction答案：B。
保护知识产权有助于促进进步，B 选项progress 正确。
A 选项confusion 混乱，保护知识产权不会带来混乱；C 选项regression 倒退，与保护知识产权的目的相反；D 选项destruction 破坏，保护知识产权不是为了破坏。
4.The purpose of intellectual property protection is to ensure that creators are rewarded for their _____.A.effortszinessC.neglectD.dishonesty答案：A。
企业对外投资国别(地区)营商环境指南英文版1. IntroductionIntroductionInvesting in foreign markets can be a strategic move for businesses seeking growth, diversification, and competitive advantage. However, navigating the complexities of different countries' (regions') business environments is crucial for success. This guide provides an overview of key factors to consider when evaluating potential investment destinations, ensuring informed decision-making and minimizing risks.2. Political Stability & GovernancePolitical Stability & GovernancePolitical stability is fundamental to a conducive business environment. Assess the host country's political climate, including government stability, democratic processes, and likelihood of civil unrest or regime change.A transparent, predictable, and corruption-resistant governance system fosters investor confidence.3. Legal & Regulatory FrameworkLegal & Regulatory FrameworkInvestigate the legal system, particularly the enforceability of contracts, property rights protection, and dispute resolution mechanisms. Understand the regulatory landscape, including sector-specific laws, licensing requirements, and compliance costs. A well-defined, consistent, and business-friendly legal framework mitigates operational uncertainties.4. Economic ConditionsEconomic ConditionsEvaluate the target country's economic health, such as GDP growth rate, inflation, exchange rate stability, and debt levels. Consider market size, consumer purchasing power, and sector-specific growth prospects. Robust economic indicators and promising sector trends indicatea fertile ground for investment.5. Market Access & CompetitionMarket Access & CompetitionAnalyze market access barriers, such as tariffs, quotas, or non-tariff measures. Study the competitive landscape, including local and international players, market concentration, and entry barriers. Favorable accessconditions and a healthy competitive environment enhance the potential for market penetration and profitability.6. Infrastructure & LogisticsInfrastructure & LogisticsAssess the quality and accessibility of transportation networks, energy supply, digital connectivity, and other essential infrastructure. Well-developed infrastructure reduces operational costs and facilitates efficient supply chain management. Additionally, examine the availability and cost of skilled labor, as a capable workforce is vital for business operations.7. Taxation & IncentivesTaxation & IncentivesFamiliarize yourself with the host country's tax regime, including corporate income tax rates, value-added tax, withholding taxes, and any double taxation treaties. Investigate available investment incentives, such as tax holidays, grants, or special economic zones. A favorable tax environment and attractive incentives can significantly impact the project's financial viability.8. Intellectual Property ProtectionIntellectual Property ProtectionStrong IP protection is crucial for businesses operating in knowledge-intensive sectors or with proprietary technologies. Evaluate the host country's IP laws, enforcement mechanisms, and track record in addressing IP infringement. Adequate IP protection safeguards your company's assets and encourages innovation.9. Environmental, Social, & Governance (ESG) FactorsEnvironmental, Social, & Governance (ESG) FactorsConsider the host country's commitment to environmental sustainability, labor standards, human rights, and anti-corruption measures. Ensure your investment aligns with your company's ESG policies and international best practices. Adhering to high ESG standards can mitigate reputational risks and foster long-term stakeholder relationships.10. Cultural Compatibility & Local PartnershipsCultural Compatibility & Local PartnersshipsUnderstanding and respecting local culture is vital for successful business integration. Cultivate relationships with potential local partners who can provide valuable market insights, facilitate regulatorycompliance, and help navigate cultural nuances. Strong local partnerships can expedite market entry and enhance overall performance.ConclusionConclusionNavigating the complexities of different countries' (regions') business environments is paramount for successful overseas investments. By diligently considering the factors outlined in this guide, companies can make informed decisions, minimize risks, and maximize the potential for profitable, sustainable growth in their chosen investment destinations.。
高三法律基础英语阅读理解20题1<背景文章>The Constitution is the fundamental law of a country. It plays a crucial role in safeguarding the rights and interests of citizens and ensuring the stable operation of the country.The Constitution stipulates the basic rights and obligations of citizens. It guarantees freedom of speech, freedom of religion, and the right to education. At the same time, citizens also have the obligation to abide by the law and pay taxes.The Constitution also defines the structure and functions of the government. It divides the power of the state into legislative, executive, and judicial branches, ensuring checks and balances among them.In addition, the Constitution reflects the values and ideals of a country. It embodies the pursuit of justice, equality, and democracy.The Constitution is not only a legal document but also a spiritual pillar. It guides the country's development and progress and inspires people to strive for a better future.1. The Constitution is the ______ law of a country.A. basicB. fundamentalC. importantD. secondary答案：B。
商务英语合同范本中高频的英语单词在商务活动中，合同是保障各方权益、明确责任义务的重要文件。
而商务英语合同范本中，有一些高频出现的单词，它们对于准确理解和撰写合同起着关键作用。
接下来，让我们一同来探索这些高频单词。
首先，“agreement”这个词可谓是商务合同中的常客。
它的意思是“协议；同意；一致”。
在合同中，通常用于表示双方达成的某种约定或共识，例如“This agreement is made between Party A and Party B”（本协议由甲方和乙方订立。
）“contract”也是不可或缺的高频词，意为“合同；契约”。
比如，“The contract stipulates the terms and conditions of the transaction”（该合同规定了交易的条款和条件。
）“obligation”常用来表达“义务；责任”。
在合同里，明确各方的义务是至关重要的，“Each party has the obligation to fulfill the terms of the contract”（各方都有履行合同条款的义务。
）“liability”这个单词表示“责任；债务；负债”。
例如，“The company shall bear no liability for any losses arising from force majeure”（公司对因不可抗力造成的任何损失不承担责任。
）“performance”指“履行；执行；性能”。
“The performance of the contract is subject to certain conditions”（合同的履行取决于某些条件。
）“breach”常被用于“违约；违反”的意思。
“In case of breach of contract, the defaulting party shall be liable for damages”（若有违约情况，违约方应承担损害赔偿责任。
中国近十年在创新方面的发展英语作文全文共3篇示例，供读者参考篇1In the past decade, China has made remarkable progress in the field of innovation. With a growing emphasis on research and development, increased investment in technology, and a strong entrepreneurial spirit, China has become a global leader in innovation. This essay will explore the key developments in China's innovation landscape over the past ten years.One of the most significant advancements in China's innovation ecosystem has been the rapid growth of its tech industry. Fueled by a large pool of highly-skilled talent, a supportive government, and a booming market for technology products and services, Chinese tech companies have developed cutting-edge innovations in areas such as artificial intelligence, big data, e-commerce, and fintech. Companies like Alibaba, Tencent, and Huawei have become household names worldwide, and are driving China's transition from a manufacturing-based economy to a knowledge-based economy.In addition to the growth of the tech industry, China has also made significant strides in other sectors such as renewable energy, biotechnology, and advanced manufacturing. The Chinese government's emphasis on innovation as a driver of economic growth has led to increased investment in research and development, the establishment of research hubs and innovation parks, and the implementation of policies to promote technology transfer and commercialization. As a result, China is now a global leader in renewable energy technology, with the world's largest solar panel and electric vehicle markets.Another key driver of China's innovation success has been the rise of its entrepreneurial ecosystem. Chinese entrepreneurs are known for their risk-taking spirit, resilience, and willingness to experiment and iterate on new ideas. The Chinese government has also played a key role in supporting entrepreneurship through policies such as tax incentives, funding programs, and regulatory reforms. As a result, China has seen a surge in the number of startups and unicorns, with many Chinese companies now competing on a global scale.Furthermore, China has made significant progress in building a more open and collaborative innovation ecosystem. Chinese companies are increasingly partnering with internationalfirms, investing in overseas markets, and participating in global research networks. China has also made efforts to attract foreign talent and encourage knowledge exchange through initiatives such as the Thousand Talents Program and the Belt and Road Initiative. These efforts have helped China to integrate into the global innovation landscape and strengthen its role as a hub for innovation and technology.Looking ahead, China faces challenges in sustaining its innovation momentum and transitioning to more sustainable and inclusive growth. As China moves towards a more knowledge-based economy, it will need to continue investing in education, skills development, and infrastructure to support innovation. China will also need to address issues such as intellectual property protection, regulatory barriers, and talent retention to build a more conducive environment for innovation.In conclusion, China's rapid growth in innovation over the past decade has been truly impressive. With a strong foundation in technology, a vibrant entrepreneurial ecosystem, and a supportive government, China has positioned itself as a global innovation powerhouse. By building on these strengths and addressing key challenges, China is well-positioned to continuedriving innovation and shaping the future of the global economy.篇2In the past decade, China has made remarkable progress in the field of innovation. The country has been actively promoting innovation as a key driver of economic growth and social development. Through various policies and initiatives, China has been able to foster a culture of innovation and entrepreneurship that has led to the creation of groundbreaking technologies and advancements in various industries.One of the key drivers of China's innovation success is the government's strong support for research and development. Over the past decade, China has significantly increased its investment in R&D, with the government spending billions of dollars to support scientific research and innovation. This investment has paid off, as China has become a global leader in several key industries, such as artificial intelligence, biotechnology, and clean energy.Another factor that has contributed to China's innovation success is the country's emphasis on education and talent development. China has made significant investments in itseducation system, with a focus on promoting STEM education and cultivating a strong pipeline of skilled workers in science and technology. This focus on talent development has helped to create a pool of highly skilled professionals who are driving innovation and technological advancements in China.Furthermore, China has been successful in creating a conducive environment for innovation and entrepreneurship. The country has implemented policies to support startups and small businesses, providing them with access to funding, resources, and support services. China has also established numerous innovation hubs and tech parks, where entrepreneurs and researchers can collaborate and exchange ideas. This has helped to create a vibrant ecosystem that fosters innovation and creativity.In addition, China has been actively promoting international collaboration in the field of innovation. The country has signed numerous agreements with other countries and organizations to promote cooperation in research and development. This has allowed China to leverage external expertise and resources, further accelerating its innovation capabilities.Looking ahead, China's innovation journey is expected to continue, with the country poised to become a global innovationpowerhouse. With its strong government support, emphasis on education and talent development, and conducive environment for innovation, China is well-positioned to lead the way in shaping the future of technology and science.In conclusion, China has made significant strides in the field of innovation over the past decade, thanks to its strong government support, emphasis on education and talent development, and conducive environment for entrepreneurship. The country's innovation success is a testament to its commitment to driving economic growth and social development through technological advancements. China's innovation journey is one that is worth watching, as the country continues to push the boundaries of what is possible in the world of science and technology.篇3Innovation has been a key focus for China over the past decade, as the country has sought to transition from being the "world's factory" to become a global leader in technology and innovation. In this essay, we will explore the developments in innovation in China over the past ten years, analyzing the key trends, challenges, and opportunities that the country has faced.One of the key trends in China's innovation landscape over the past decade has been the rapid growth of the country's technology sector. Chinese companies such as Alibaba, Tencent, and Xiaomi have become global leaders in areas such ase-commerce, social media, and smartphone manufacturing. These companies have been able to achieve this success through a combination of government support, investment in research and development, and a large domestic market.Another important trend in China's innovation landscape has been the rise of entrepreneurship and start-ups. The Chinese government has implemented a number of policies designed to support entrepreneurship, including providing funding and resources to start-ups, creating innovation hubs in cities such as Beijing and Shanghai, and fostering a culture of innovation and risk-taking. As a result, China has seen a surge in the number of new companies and entrepreneurs, many of which are focused on cutting-edge technologies such as artificial intelligence, biotech, and clean energy.However, despite these successes, China also faces a number of challenges in its quest to become a global leader in innovation. One of the key challenges is the country's heavy reliance on technology transfer and imitation, rather than true innovation.While Chinese companies have been able to replicate and improve upon existing technologies, they have struggled to develop breakthrough innovations that can compete with the likes of Silicon Valley.Another challenge is the lack of intellectual property protection in China, which has deterred many foreign companies from investing in the country's technology sector. This has not only limited the flow of foreign capital and expertise into China but has also hindered the country's ability to develop its own intellectual property and protect its innovations from being copied by others.Despite these challenges, China also has a number of opportunities to further strengthen its position as a global leader in innovation. One of the key opportunities is the country's large and rapidly growing domestic market, which provides a fertile ground for companies to test and scale new technologies and business models. Chinese companies can also take advantage of the country's vast pool of engineering talent, low-cost manufacturing capabilities, and supportive government policies to drive innovation and growth.In conclusion, China has made significant strides in innovation over the past decade, but the country faces a numberof challenges in its quest to become a global leader in technology and innovation. By addressing these challenges and seizing the opportunities that lie ahead, China has the potential to become a powerhouse of innovation that will shape the future of the global economy.。
品牌授权书中英文版本Brand Authorization Letter尊敬的合作伙伴，非常感谢您对我们品牌的关注和支持。
为了确保品牌的合法使用和保护品牌的权益，我们特发出此品牌授权书，授权给您使用我们的品牌名称和标识。
一、授权范围我们特此授权您在以下范围内使用我们的品牌名称和标识：1. 在您的官方网站上展示我们的品牌名称和标识，并提供相关产品的介绍和销售信息；2. 在您的实体店铺中使用我们的品牌名称和标识，并展示相关产品；3. 在您的广告宣传材料中使用我们的品牌名称和标识，包括但不限于海报、传单、电视广告等。
二、使用规范为了保护品牌形象和品牌价值，我们要求您在使用我们的品牌名称和标识时遵守以下规范：1. 不得对我们的品牌名称和标识进行任何形式的篡改、修改或变形；2. 不得在未经授权的情况下将我们的品牌名称和标识用于其他产品或品牌；3. 不得以任何方式损害我们品牌的声誉和形象；4. 不得以任何形式进行虚假宣传或误导消费者。
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谢谢！英文版：Dear Partner,Thank you for your interest and support in our brand. In order to ensure the legal use and protection of our brand, we hereby issue this brand authorization letter, authorizing you to use our brand name and logo.I. Scope of AuthorizationWe hereby authorize you to use our brand name and logo within the following scope:1. Display our brand name and logo on your official website, providing information and sales details of our related products;2. Use our brand name and logo in your physical stores, displaying our related products;3. Use our brand name and logo in your advertising materials, including but not limited to posters, flyers, television commercials, etc.II. Usage GuidelinesTo protect the brand image and value, we require you to comply with the following guidelines when using our brand name and logo:1. Do not alter, modify, or distort our brand name and logo in any form;2. Do not use our brand name and logo for other products or brands without authorization;3. Do not engage in any activities that may damage the reputation and image of our brand;4. Do not engage in any form of false advertising or misleading consumers.III. Intellectual Property ProtectionWe hold complete intellectual property rights over our brand name and logo. When using our brand name and logo, you must not infringe upon our intellectual property rights, including but not limited to trademark rights, copyrights, etc. If any infringement is discovered, we will take legal action to protect our rights.IV. Term and TerminationThis authorization letter is valid for one year, starting from the date of signing by both parties. Renewal or termination of this authorization letter can be negotiated by both parties.V. Other Terms1. Any amendments or supplements to this authorization letter must be agreed upon in writing by both parties;2. This authorization letter shall be interpreted and executed in accordance with the laws of the People's Republic of China;3. This authorization letter is made in duplicate, with each party holding one copy, both having equal legal effect.Please carefully read the above content and sign and stamp to confirm your agreement and acceptance of this authorization letter. If you have any questions or need further negotiation, please feel free to contact us.Thank you!。
ECONOMIC GROWTH CENTERYALE UNIVERSITYP.O. Box 208269New Haven, CT 06520-8269CENTER DISCUSSION PAPER NO. 831 DOES INTELLECTUAL PROPERTY PROTECTION SPURTECHNOLOGICAL CHANGE?Sunil KanwarYale University and University of DelhiandRobert E. EvensonYale UniversityJune 2001Note:Center Discussion Papers are preliminary materials circulated to stimulate discussions and critical comments.We are most indebted to T. Paul Schultz and Doug Gollin for their time and trouble. We would also like to express our gratitude to William Nordhaus, Gus Ranis, Peter Phillips, Jenny Lanjouw, and theparticipants of the Development Discussion Group at the Department of Economics, Yale University.This research was conducted while the first author was a Fulbright Visiting Fellow at the Department of Economics, Yale University.This paper can be downloaded without charge from the Social Science Research Network electronic library at: /paper.taf?abstract_id=275322 An index to papers in the Economic Growth Center Discussion Paper Series is located at:/~egcenter/research.htmSunil Kanwar and Robert EvensonAbstractOf the diverse factors motivating technological change, one factor that has received increasing attention in the recent past has been the protection of intellectual property rights. Given fairly recent changes in the international policy ethos where a regime of stronger intellectual property protection has become a fait accompli for most developing countries, it is of some significance to ask whether more stringent protection of intellectual property does indeed encourage innovation. And this is the question which this paper examines, utilising cross-country panel data on R&D investment, patent protection and other country-specific characteristics spanning the period 1981-1990. The evidence unambiguously indicates the significance of intellectual property rights as incentives for spurring innovation.JEL Classification: O34, O31Keywords: Intellectual Property Rights, Technological Change, Economic GrowthSunil Kanwar and Robert EvensonA distinctive characteristic of modern economic growth has been the significant role played by technological change. Of the diverse factors motivating technological change, one factor that has received increasing attention in the recent past has been the role of intellectual property protection. Given the shift in the ownership distribution of innovations away from individuals and towards large corporations in ‘recent decades’1, intellectual property protection has arguably become an even more important stimulus than hitherto; for such protection augments both the means and the incentive to undertake expensive innovation. While there has been an on-going debate on whether strong(er) intellectual property protection encourages or retards the rate of technological change and, by implication, that of economic growth, policy-makers have in any case moved towards a regime of stronger intellectual property protection in recent times, as evidenced by the agreement on Trade Related Intellectual Property issues (TRIPs) under the GATT-WTO2 in April 1994.That the inventor be given protection for his invention was a principle recognized as early as the fifteenth century, when the very first patents were granted by the city state of Venice. The motives cited were the natural right of the inventor to the fruits of his labour, the benefits accruing therefrom to society at large, society’s compensation (therefore) of the costs incurred by him, and the fillip this would provide to inventive propensities (Mandich, 1948). This is not to imply, however, that opposition to such protection did not also exist right from the early times. Some argued even then, for instance, that such protection mimicked2prohibitive tariffs (insofar as the protected products could not be imported freely, hindering trade) and ought not to be granted (Schiff, 1971)3. That this issue has continued to remain controversial into the present times would be understating the case; one of the important reasons for this being the lack of cumulative empirical evidence. Evenson (1990) categorises the attempts to examine the incentive effects of IPRs on innovation into two - studies of (firm) behaviour (see the following section; references in Evenson 1990; Lanjouw and Cockburn 2000; and Sakakibara and Branstetter 2001), and studies on the intrinsic value of protection (see the references cited in Evenson 1990; and Schankerman 1998). To these categories we may add (or else widen the first category to include) attempts to estimate aggregate or economy-wide response (Gould and Gruben 1996). The evidence is thin and mixed, to say the least. Evenson himself opines that the (weak) evidence "... does not imply that intellectual property rights are of little value as inducements to innovate. It attests to the relevance of the process of imitation".This paper seeks to analyse empirically the influence that intellectual property protection might have on innovation and technological change. We study this relationship at the economy-wide level, using cross-country data on the strength of intellectual property rights, technological change and other relevant country-specific controls. Our evidence shows unambiguously, that intellectual property protection (proxied by an index of patent rights) has a strong positive effect on technological change (proxied by R&D investment expenditures), and therefore on economic growth. This has obvious implications for developing countries, which have been confronted by an international policy ethos favouring the strengthening of intellectual property rights under the recent TRIPs agreement almost as a fait accompli. We3provide some evidence that conforming with the agreement may not be fruitless in the longer run. Of course, needless to add, the strengthening of IPRs must occur not just on the statute books but in reality. Only then would stronger IPRs provide the right incentives for innovation.Section 2 briefly considers the pros and cons of weak protection versus strong protection in the global context, and the implications this might have for the relation between intellectual property protection and technological change. Section 3 delineates the estimation model. Section 4 briefly discusses the data and samples used for estimation, and the appropriate estimation procedure in our context. Section 5 then presents the estimation results while section 6 outlines some broad conclusions.Strong protection or Weak protection?When considering the process of technological change, two important characteristics of innovations ought to be kept in mind. First, innovations are non-rival goods. That is, use of a particular innovation by a producer does not preclude other entrepreneurs from using it. Second, innovations are partially non-excludable goods. This implies that the innovator is often unable to completely prevent others from unauthorisedly using the innovation (Romer, 1990). It is these two properties of innovations that form the basis of the argument in favour of intellectual property protection, which serves to decrease the degree of non-excludability of innovations by assigning to the inventor the property rights over his innovation for a given period of time. How strong should the protection given be, however, is a difficult and complex question to settle in practice. We briefly discuss below the various arguments for and4against the strong protection of intellectual property.Arguments favouring weak protectionOne of the more obvious benefits supposed to accrue from the weak protection of intellectual property (as in developing countries), is to keep the market prices (of products made from or using protected technology) low. Second, a related positive is claimed to be the cheap acquisition of technology. Underlying these arguments appear to be the suppositions that protected products have no close substitutes or competition, that the menu of products available would be the same irrespective of the protection regime (i.e. strong or weak), and that there are no offsetting costs to the countries in question (Sherwood, 1990). Third, there are several instances of patent abuse involving inadequate disclosure in developing countries, where important bits of knowledge have been withheld from the patent applications, without which even those skilled in the art would not be able to replicate the inventions after the expiry of the patent (Roffe, 1974). Fourth, strong protection, by creating a monopoly, may induce the producer to accumulate 'sleeping patents' in an effort to preserve market share (Gilbert and Newbery, 1982). In which case, strong protection will only serve to limit the rate of technological change. Although, whether a producer would want to preserve market share with extant technology would depend upon whether or not he can do better by innovating (Park, 1997).In a global context, Deardorff (1992) demonstrates that as patent protection spreads (to developing countries, for instance), the gains from protection in the form of monopoly profits to inventors taper off as diminishing returns set in, and at some point could fall short of5the costs arising from distorted consumer choice due to monopoly pricing. Again, Chin and Grossman (1990) show that the globally efficient degree of protection may not be evenly welfare-maximising. Thus, in the South or innovation-importing countries, welfare may be negative. Grossman and Helpman (1991) show that stronger protection (or production subsidies) would cause the global rate of technical innovation to fall. Finally, Helpman (1993) shows that strong protection will increase the rate of innovation only in the short term as it raises profitability; in the long term it lowers the innovation rate as the producers tend to produce the older products.Arguments favouring strong protectionOn the other hand, there is evidence which suggests that strong protection stimulates innovative activity, at least in some industries such as pharmaceuticals and chemicals. Thus, Levin et.al. (1987), in a survey of 650 American R&D executives who had been asked to rank order alternative means of protecting products and processes across 130 industries, found that for the pharmaceuticals and chemicals industries the executives placed great emphasis on patent protection. This result is supported by Mansfield (1986), who questioned a hundredR&D executives across different U.S. industries about what percentage of their inventions over the period 1981-1983 would not have been made had it not been for the availability of patents. The survey responses revealed that 60% of the inventions in pharmaceuticals and about 40% in chemicals would not have been developed in those circumstances (see Evenson 1990 for a summary of similar evidence). This evidence is in consonance with Segerstrom (1991) who shows that government incentives to innovation unambiguously increase inventive6intensity, although welfare increases only if innovation intensity exceeds a threshold. It is not, however, necessarily in agreement with Segerstrom, Anant and Dinopoulos (1990), who show that stronger protection may either increase or lower inventive activity.Second, 'strong' protection is often necessary because even with this ‘strong’protection competition begins to gnaw away the profits fairly quickly. Lesser (2000) notes that the commercial life of a new (crop) variety in the U.S. is only about 7 years and has been declining due to competition (and is not the statutory 20 years). Mansfield (1985), using a survey of 100 U.S. firms spanning 13 manufacturing industries, reports that the average time lapse till the point where information on new products or processes is leaked to rival firms was only about a year for products and 15 months for processes.Third, foreign direct investment and the transfer of technology from the North to the South may be adversely affected, at least in certain industries, if adequate protection is wanting in the South. Taylor (1993, 1994) shows that weak protection in the South (to facilitate unintended technology transfers, for instance), would evoke a defensive response from inventors in the North, which may ultimately eliminate the gains from weak protection. Lai (1998) qualifies this statement by showing that the relationship between protection (in the South) and innovation (in the North) depends on whether imitation or ‘multinationalization’(i.e. foreign direct investment) is the mode of international production transfer. If imitation is the mode of production transfer, stronger protection will lower the rate of innovation and the rate of technology transfer; but if multinationalization is the channel, the effect on innovation and the rate of technology transfer from the North to the South will be just the opposite. Diwan and Rodrik (1991) demonstrate that when the structure of demand in the South differs7markedly from that in the North, (strong) protection in the South will stimulate invention (in the North), leading to net gains for the South. By implication, given the existence of considerable taste differentials between developing and developed countries (as in pharmaceutical and agricultural products), the South may lose considerably by not granting adequate protection.Fourth, strong protection by the South may be necessary if it is to prevent rampant piracy of intellectual property and consequent retaliation by the North (for some piracy estimates see Gadbaw and Richards 1988). It was the loss of this potential profit which originally motivated the North (particularly the United States) to bargain hard to bring intellectual property issues within the purview of the GATT/WTO; for the dispute settlement mechanism in this forum was reasonably effective, whereas there was no such mechanism in the WIPO4 (Sherwood, 1990). Moreover, by linking intellectual protection with trade, the North gained insofar as it could use trade sanctions to counter piracy5. This can be prevented, however, if the root cause of piracy - namely, weak protection - is remedied.Thus, we find that a host of arguments can be adduced for and against the strong protection of intellectual property rights. From the arguments per se and the empirical evidence, one is hard put to decide on the appropriate degree of protection. Nor is the theoretical literature much help in this regard. It is the purpose of this paper, therefore, to empirically examine the relationship between intellectual property protection and the rate of technological change.The Estimation Model8In doing so we do not wish to deduce the relationship from a more general relationship such as that between economic growth and protection (as do Gould and Gruben 1996), because economic growth is a very complex and ill-defined process, at least relatively speaking. In other words, the relationship between protection and technological change does not follow very easily from findings relating to the relationship between protection and economic growth. Therefore, it might be more convincing to dwell on the behaviour of technological change per se, the variable on which protection is supposed to have a more direct impact.Capturing technological changeTo proceed with the estimation we must first clarify what constitutes technological change. At one level technological change may be interpreted to refer not to the change in technology in existence (i.e. known to society at any given point in time), but rather to the change in technology in use? Obviously, the latter cannot occur without the former. However, the former can and does occur independently of the latter. Thus, many new innovations may exist and yet not be commercially exploited because, for instance, they may be economically unviable. To the extent that they are not yet employed, they do not cause any change in the extant technology of production, and hence do not influence economic growth. By the same token, only when they are exploited in the market can the technology of production be said to have changed, with possible ramifications for economic growth. Therefore, it is this phenomenon of the adoption or economic exploitation of innovations that ought ideally to be emphasized, rather than the phenomenon of the generation of innovations per se. In actual fact, however, this distinction may not be practicable.9We propose to represent technological change, therefore, by research and development investment as a proportion of gross national product (RDI)6. While all of research and development expenditure does not necessarily fructify into inventions and innovations, such investment has the virtue of being more closely related to inventive activity than is, say, non-residential physical capital investment, while at the same time being more ‘all-encompassing’ than still another possible proxy, namely patent applications.The explanatory variablesCountries differ widely in the strength of protection that they provide to intellectual property. While a comprehensive evaluation of the relative strengths of protection would require dwelling on each of several instruments such as patents, trademarks, copyrights and trade secrets (South Centre, 1997)7, differences in patent laws across countries are considered the most important and are perhaps the most dramatic. The protection offered may differ along several dimensions. Thus, patent laws across countries differ with respect to coverage. While some countries allow both product and process patents in a broad range of activities, some disallow product patents for innovations in certain areas such as pharmaceuticals, chemicals and food products (e.g. India). Second, patent laws differ with respect to the duration of protection. Patent duration in most western European nations has been 20 years, whereas in other countries it has varied between 5 and 17 years (e.g. India, Pakistan, Sri Lanka, Jordan, US). Further, while some countries measure patent life from the patent application filing date (e.g. Nigeria, Jordan, Thailand), others measure it from the publication date (India, Korea, Austria, Australia), while still others measure it from the grant date (Pakistan, Mexico, Portugal, Canada, Iceland, US). Third, enforcement procedures may differ depending on whether or not countries allow for preliminary injunctions in the case of an alleged infringement, and on who carries10the burden of proof. Fourth, while some countries allow pre-grant opposition to a patent application (e.g. Japan), others allow only post-grant opposition (e.g. western European countries). Fifth, in some countries patentees may face a higher risk of loss of protection (once granted) on account of 'non-working' of the patent or else compulsory licensing. And so on. There are many other differences that one could list. While the TRIPs agreement of 1994 allows for a process of gradual harmonisation of the protection laws across the member countries, and this process is indeed underway, many of these differences still obtain in large measure. These differences are captured by Ginarte and Park (1997) in an index, which we use as the index of protection (IP) variable8. The index incorporates five aspects of patent laws: extent of coverage, membership in international patent agreements, provisions for loss of protection, enforcement mechanisms, and duration of protection. It ranges from zero to five with higher values of the index indicating stronger patent protection.Several control variables are considered. R&D investment, and investment in general, have been found to be pro-cyclical for various reasons - the availability of internal funds for activities for which loans are usually not available (Hall 1992; Himmelberg and Petersen 1994), and demand pull forces indicating profitability being two of the most important (Geroski and Walters 1995). This may be captured by introducing (current) GDP as a regressor (Guellec and Ioannidis 1997; Geroski and Walters 1995; Barro 1991; Kamien and Schwartz 1982; Nadiri 1980). Using this variable as a regressor, however, does not tell us much about the mechanism of causation. Also, it is a nonstationary variable, and it does not make sense to use nonstationary variables to explain movements in stationary variables such as RDI9. To remedy this (at least relatively10), we propose to use instead two separate variables. To represent the internal funds available for R&D investment we use gross domestic savings as a proportion of GDP, lagged one period (S(-1)), whereas to capture the demand-pull factors we use the11ratio of current per capita GDP to per capita GDP lagged one period (?GDPPC)11.Countries that have factor bundles that contain relatively more human capital will tend to innovate and hence invest at a faster rate than countries having factor bundles with lower proportions of this resource, because this input is central to research and development (Romer 1990). In other words, it is an enabling factor. Given that in certain skills (e.g. in communications) the returns are higher if others are also skilled, increases in human capital tend to induce higher rates of investment (Romer 1991). In cross-country analysis we must also allow for the fact that more educated countries are better able to absorb the innovations made elsewhere (Nelson and Phelps 1966). We do not consider literacy rates apt for this purpose, because these are usually based on criteria such as whether the respondent can sign his name, or whether he can identify a given number of characters of some language etc., which are not particularly cogent indicators of his skill level. Nor would primary school enrolment rates serve the purpose, because too many countries have already achieved 100% enrolment at this level and hence there would be insufficient variation in this variable.(Barro, 1991). Besides, ideally we ought to use a stock measure of human capital rather than a flow measure. Therefore, we represent the human capital variable by the Barro-Lee (2000) data on the average number of years of formal schooling of the population equal to or over age 15 (EDU).Political instability is an important factor influencing investment decisions. Countries with unstable political, and hence economic, climates witness a drying up of productive investment. Even localized political conflicts that tend to be long drawn out can stifle investment in those regions within countries or at the very least divert scarce resources away12from R&D towards the control and resolution of that conflict. We propose to represent this factor by a relatively comprehensive ‘state failure’ dummy. Using data on genocides and politicides, revolutionary wars, ethnic wars, and abrupt régime changes towards autocratic rule compiled by the Center for International Development and Conflict Management (see Esty et.al. 1998), we construct a political instability dummy (ID) for each country which equals 1 in years exhibiting one or more of these phenomena and equals 0 otherwise.The I-O literature points out that lending institutions are reluctant to lend for R&D activities simply because such ventures tend to be highly risky with uncertain expected rates of return. Therefore, R&D investment tends to get financed mainly from internal funds (Hall 1992; Himmelbery and Petersen 1994). Hence, as we argued above, the importance of savings. Even so, the real lending rate of interest (RLR) may be used as an additional control variable, perhaps to reflect the opportunity cost of internal funds if not the actual cost of borrowed funds used for R&D (Guellec and Ioannidis 1997).Finally, it has been argued that the trade orientation of a country can be of importance in determining its propensity to innovate. The conjecture (sometimes implicit) is that relatively open economies tend to face relatively more competition, not having access to sheltered markets, and are compelled to invest relatively more in R&D (Edwards 1992; World Bank 1987; Krueger 1978; Bhagwati 1978; and Lewis 1955). Measuring the degree of openness of an economy, however, has proved a fairly thorny exercise. The alternative measures used in the literature have been exports shares, trade shares (i.e. exports plus imports as a share of GDP), effective tariff rates, real exchange rate distortions, black market exchange rate premiums and still other measures. All of these measures may be shown to be deficient in one1314respect or another. Some, however, are better than others and one that seems to be preferred is the black market exchange rate premia (Gould and Gruben 1996). We, therefore, use the black market exchange rate premia to construct a black market premium dummy (BMPD),which equals 0 for relatively open economies or those whose black market premium is less than the median of the sample countries, and 1 for the relatively closed economies or those whose black market premium is more than the median 12.The above discussion leads us to the following estimation model:RDI t = f(S t-1, ?GDPPC t , EDU t , BMPD t , ID t , RLR t , IP t )(1)where the different variables are as defined above. What we are interested in is the 'long term'relationship between intellectual property protection and research and developmentinvestment, and it appears reasonable that yearly data would not be appropriate to capture it.Surely, yearly changes in research and development investment cannot be expected to reflect the response of innovation to changes in the strength of protection, not only because changes in the latter are rather occasional, but also because innovation decisions tend to be relatively long term decisions. It would be more plausible, therefore, to estimate this relationship using data averaged over longer periods than a single year. Such averaging would reduce, if not eliminate, the yearly variations in R&D investment on account of 'short run' causes. Over how many periods should the data be averaged, however, is not à priori clear. Following the lead of earlier researchers studying long-term macro-relationships using panel data (e.g. Islam 1995), we use quinquennial data to estimate this relationship. Partly, we are forced to do this,because data on some variables such as education (EDU) and the index of protection (IP) are only available on a quinquennial basis (see the data section below).Data, Samples and Estimation IssuesData and SamplesData on the variables discussed above were collected from several different sources (see Appendix 3). The maximum sample size was 32 countries (listed in Table 1). The major constraining factor for the sample period was the short series for R&D investment, which was available only from 1981 to 1990 for a respectable number of countries. But for this constraint, the sample period could have been longer. While data on most variables were available on a yearly basis, those for EDU and IP were only available quinquennially. Atleast for variable IP this is understandable, because changes in patent laws and their enforcement are few and well-spaced so that it becomes difficult to capture changes in protection levels on a yearly basis. The summary statistics pertaining to the variables are listed in Appendix 1.Data on all the variables were available for only 29 countries for the period 1981-199013. Since we propose to use five-year averages, this implies that we have only two data points for each country, 1985 (or the average for 1981-85) and 1990 (or the average for 1986-90), for a total of 58 observations. Estimations using this sample constitute 'Exercise 1'. If we are prepared to drop variable RLR from the initial general model, on grounds that earlier work on R&D shows internal funds to be the really significant source of funds for such investment, then our sample size becomes 31 countries (now including Jordan and Pakistan). Estimations using this larger sample constitute 'Exercise 2'. Many researchers have used literacy rates (LIT) in lieu of the human capital variable that we have defined above. While we have reservations about the use of literacy rates to represent skill levels (which we briefly voiced above), doing so expands our sample of countries by another (Nigeria). Estimations15。
