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
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: Suggested Citation