If follows that a satisfactory analysis of intellectual property rights that accounts for foreign direct investment requires models that are significantly broader than what I have used so far. Such major extensions are beyond the scope of this paper. On the other hand an approach that builds on the notion that whenever wages are lower in the South innovating companies in the North find it profitable to shift manufacturing facilities to the South greatly oversimplifies the problem at hand. It may even lead to misleading conclusions, and especially so in one-factor one-sector frameworks. Nevertheless, in order to obtain some feeling for the role that FDI may play in the evaluation of tighter intellectual property rights I provide in this section a simple analysis that builds on this very notion.