This paper addresses the effects of a stronger patent system in developing countries on the quality of transferred technology and welfare. We show that a stronger patent system can reduce the quality of licensed technology. The presence of technology licensing may encourage the developing...

Recent evidences show the co-existence of lower trade cost and higher amount of foreign direct investment (FDI), which cannot be explained by the traditional "proximity-concentration trade-off". We show that if both the home and the host country markets are important to the foreign firm, lower...