Protection of intellectual property rights (IPRs) and multinational firm boundaries: an examination of Korean firms' exports to affiliates

In this study, we examine Korean firms' exports to foreign affiliates as an internalisation measure to understand how innovation is related to internalisation. We have analysed a novel, economy-wide panel dataset of 21,393 Korean firms from 2008 to 2019 and found that firms' innovation is positively related to the internalisation of product markets in international business, and that this relationship is attenuated by the host country's intellectual Property (IP) strength. Our findings are consistent with those of prior studies and suggest that firms' internalisation decisions can be understood within the single mode of foreign entry.