The Geographical Boundaries for the Exhaustion Principle of Intellectual Property Rights, Parallel Trade and Foreign Direct Investment

This study’s main motivation is to review the trade literature on the implications that trade-integrated countries may adopt different geographical boundaries for the exhaustion of intellectual property rights (national, international, regional), and to discuss potential gaps in the literature. The main argument is that a policy change in such geographical boundaries will have important implications on (i) retailers’ parallel trade decisions, (ii) manufacturers’ strategic market behavior and foreign direct investment decisions, and (iii) countries’ welfare (consumer surplus and firms’ profits). Also this study would like to introduce this topic to the Turkish economics literature