[26] The U.S. government and U.S. corporations have long advocated the establishment and protection of intellectual property rights. The Office of the U.S. Trade Representative monitors countries with reported violations and reports on the status of intellectual property protection in its annual report, Foreign Trade Barriers.

[27] An affiliate refers to a business enterprise located in one country that is directly or indirectly owned or controlled by an entity in another country. The controlling interest for an incorporated business is 10% or more of its voting stock; for an unincorporated business, it is an interest equal to 10% of voting stock.

[28] In addition, data on the destination of multinational corporate sales to foreign affiliates also suggest that market access is an important factor in the firms' decisions to locate production abroad. See Borga and Mann (2004).

[29] The Bureau of Economic Analysis (BEA), the source of U.S. royalty and fees data, collects data on the following Asian countries/economies: China, Hong Kong, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Taiwan, Thailand, and other unspecified Asian countries. See BEA (2007).

[30] Asia has purchased more manufacturing know-how than the EU since 1987, the first year data were collected on manufacturing know-how. See BEA (2007).