Intellectual Property Rights and Foreign Direct Investment: The Role of Industry and Host-Country Characteristics

Kiel Working Paper No. 1167

50 Pages Posted: 27 Aug 2003

Date Written: June 2003

Abstract

This paper aims at overcoming several shortcomings of previous empirical studies on the relationship between IPR protection and FDI. First, FDI is analyzed on a sectorally and regionally disaggregated level. Second, we address the proposition that stronger IPR protection raises not only the quantity, but also the quality of FDI. Third, we check to which extent the relationship between IPR protection and FDI is affected by applying alternative measures of IPR protection. Our empirical findings support the hypothesis that the threat of an unauthorized use of intellectual-property-related assets and, thus, FDI depends on industry as well as host-country characteristics. Furthermore, stronger IPR protection tends to induce high-quality FDI.

Keywords: intellectual property rights, ownership advantages, imitative capacity, quantity and quality of FDI, industry characteristics, host-country characteristics

JEL Classification: F21, F23

Suggested Citation

Nunnenkamp, Peter and Spatz, Julius, Intellectual Property Rights and Foreign Direct Investment: The Role of Industry and Host-Country Characteristics (June 2003). Kiel Working Paper No. 1167. Available at SSRN: https://ssrn.com/abstract=425240 or http://dx.doi.org/10.2139/ssrn.425240

Peter Nunnenkamp

University of Kiel ( email )

D-24100 Kiel
Germany

Julius Spatz (Contact Author)

Independent

No Address Available

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