The Composition of Foreign Direct Investment and Protection of Intellectual Property Rights Evidence from Transition Economies

While existing literature has examined the impact of intellectual property protection on the volume of foreign direct investment (FDI), little is known about its effect on the composition of FDI inflows. The author addresses this question empirically, using a unique firm-level data set from Eastern Europe and the former Soviet Union. She finds that weak protection deters foreign investors in technology-intensive sectors that rely heavily on intellectual property rights. The results also indicate that a weak intellectual property regime encourages investors to undertake projects focusing on distribution rather than local production. The latter effect is present in all sectors, not justthose relying heavily on intellectual property protection.

[1]  K. Maskus,et al.  Intellectual property rights and licensing: An econometric investigation , 2001 .

[2]  David P. McCaffrey,et al.  Multinational Enterprises and the Global Economy. , 1995 .

[3]  Gábor Hunya.  Large privatisation, restructuring and foreign direct investment , 1997 .

[4]  A. Kokko,et al.  Local Technological Capability and Productivity Spillovers from FDI in the Uruguayan Manufacturing Sector , 1996 .

[5]  R. Caves,et al.  Multinational Enterprise and Economic Analysis: Preface , 2007 .

[6]  S. Claessens,et al.  World development report 1996 : from plan to market , 1996 .

[7]  Walter G. Park,et al.  DETERMINANTS OF PATENT RIGHTS : A CROSS-NATIONAL STUDY , 1997 .

[8]  Chwo-Ming Joseph Yu,et al.  The experience effect and foreign direct investment , 1990 .

[9]  Michael J. Ferrantino,et al.  The effect of intellectual property rights on international trade and investment , 1993 .

[10]  J. Oxley.  Institutional environment and the mechanisms of governance: the impact of intellectual property protection on the structure of inter-firm alliances , 1999 .

[11]  K. Meyer.  Direct Foreign Investment in Eastern Europe the Role of Labor Costs , 1995 .

[12]  Kirsty Hughes,et al.  Foreign Direct Investment in Central and Eastern Europe: Multinationals in Transition , 1997 .

[13]  A. Venables,et al.  Foreign direct investment in economic transition: the changing pattern of investments , 1996 .

[14]  Edwin Mansfield,et al.  Intellectual Property Protection, Foreign Direct Investment, and Technology Transfer , 1994 .

[15]  Magnus Blomstrom.  Host Country Benefits of Foreign Investment , 1991 .

[16]  S. Wei,et al.  Corruption and Composition of Foreign Direct Investment: Firm-Level Evidence , 1999 .

[17]  Pamela J. D. Smith.  How do foreign patent rights affect U.S. exports, affiliate sales, and licenses? , 2001 .

[18]  J. Dunning,et al.  The New Globalism and Developing Countries , 1998 .

[19]  E. Wolff,et al.  Multinational Corporations and Productivity Convergence in Mexico , 1989 .

[20]  S. Wei,et al.  Does Corruption Relieve Foreign Investors of the Burden of Taxes and Capital Controls? , 1999 .

[21]  Mona Haddad,et al.  Are there positive spillovers from direct foreign investment?: Evidence from panel data for Morocco , 1993 .

[22]  Richard T. Rapp,et al.  Benefits and Costs of Intellectual Property Protection in Developing Countries , 1990, Journal of World Trade.

[23]  P. Braunerhjelm,et al.  Host Country Characteristics and Agglomeration in Foreign Direct Investment , 1995 .

[24]  Dani Rodrik,et al.  Policy Uncertainty and Private Investment in Developing Countries , 1989 .

[25]  Edwin Mansfield,et al.  Intellectual Property Protection and U.S. Foreign Direct Investment , 1996 .

[26]  Carsten Fink,et al.  International transactions in intellectual property and developing countries , 2000, Int. J. Technol. Manag..

[27]  J. Markusen.  The Boundaries of Multinational Enterprises and the Theory of International Trade , 1995 .

[28]  S. Grubaugh.  Determinants of Direct Foreign Investment , 1987 .