Intellectual Property Protection and Degree of Ownership of Emerging-market Multinational Enterprises: The Moderating Role of Home-country Government Support

Abstract

In this article, we aimed to investigate the influence of the distance of intellectual property protection (IPP) between the home and host countries in the degree of ownership of subsidiaries of emerging-market multinational enterprises (EMNEs) and the moderating role of the financial support of the home-country government in the relationship between the IPP distance and the degree of ownership. We applied a binominal panel probit model to analyze data from 296 subsidiaries of 32 Brazilian multinationals in 40 host countries during the period 2006–2015. The results indicate that Brazilian multinationals tend to opt for full ownership in host countries with a positive IPP distance and that this tendency is maintained with financial support from the home-country government. The results support the importance of formal institutions to EMNEs’ strategic decisions and contribute to the discussion of the importance of IPP for international business. This study seeks to contribute to the literature by analysing the link between the degree of ownership of EMNEs and the distance of IPP between the home country and the host countries, an under-analysed topic. In addition, the present study also contributes to the advancement of research on EMNEs by examining the Latin American context.