What are property rights and how do they affect foreign firms’ strategies in emerging markets?

Question

What will be an ideal response?

Answer 1

Property rights are legal rights over a resource and the income which is generated from that resource. A company’s intellectual or industrial property are among its most important assets, as it spends considerable amounts in establishing brand names or trademarks which symbolize quality and image. Intellectual property (IP) refers to property created by intellectual activity and the owners of the intellectual property are granted exclusive rights on this property by obtaining patents, copyrights or trademarks (Onkvisit and Shaw, 2008). IP includes inventions, literary works, music, as well as designs used in commerce (Hill, 2011).

IP theft can result in loss of company-specific know-how and thereby lead to significant issues for multinationals. Many multinationals have also been trying to reduce their exposure to risks stemming from the lack of protection of intellectual property. Some companies have developed technologies that identify their products, such as three dimensional markers or different packaging which is hard to obtain by counterfeiters. Another way to deal with such problems is to work with the local governments, dedicating company resources in order to control the counterfeit operations. For EMs, the endorsement of IP laws arises as a major issue. Many EMs are taking measures to increase IP protection in their markets.