Trademark Rights: The Impact of Joining the Madrid Protocol on International Marketing Alliances

Abstract

This research examines how trademark rights impact international marketing alliances. Drawing on the transaction cost theory, the authors examine how the strengthening of trademark rights influences the formation of international marketing alliances by reducing uncertainty in the relationships between alliance partners. Using a difference-in-difference approach and data on 29,858 alliances from 45 countries, the authors find that the likelihood of initiating international marketing alliances increases after a country strengthens its trademark rights by joining the Madrid Protocol. This study contributes to the research on the role of institutional environments, specifically those related to intellectual property rights, in the formation of international strategic alliances.