Abstract
This paper aims at overcoming several shortcomings of previous empirical studies on the relationship between IPR protection and FDI. First of all, we use sectorally disaggregated FDI data for a large sample of host countries. 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 may help induce high-quality FDI. JEL no. F21, F23
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Barro, R. J., and J.-W. Lee (2000). International Data on Educational Attainment: Updates and Implications. Working Paper 42. Center for International Development 〈http://www.cid.harvard.edu/ciddata/ciddata.html〉.
BEA (Bureau of Economic Analysis) (2003). Online Data Base on U.S. Direct Investment Abroad 〈http://www.bea.doc.gov/bea/di/dilusdbal.htm〉.
Carr, D. L., J. R. Markusen, and K. E. Maskus (2001). Estimating the Knowledge-Capital Model of the Multinational Enterprise.American Economic Review 91 (3): 693–708.
Dunning, J. H. (1977). Trade, Location of Economic Activities and the MNE: A Search for an Eclectic Approach. In P.-O. Hesselborn, B. G. Ohlin, P.-M. Wijkman (eds.),The International Allocation of Economic Activity. London: Basingstoke.
Dunning, J. H. (1981).International Production and the Multinational Enterprise. London: George Allen and Unwin.
Ferrantino, M. J. (1993). The Effect of Intellectual Property Rights on International Trade and Investment.Review of World Economics/Weltwirtschaftliches Archiv 129 (2): 300–331.
Ginarte, J. C., and W. G. Park (1997). Determinants of Patent Rights: A Cross-National Study.Research Policy 26 (3): 283–301.
Horstmann, I. J., and J. R. Markusen (1987). Licensing versus Direct Investment: A Model of Internalization by the Multinational Enterprise.Canadian Journal of Economics 20 (3): 464–481.
Jost, T., and P. Nunnenkamp (2003). Deutsche Direktinvestitionen in Entwicklungs-und Reformländern: Haben sich die Motive gewandelt?Die Weltwirtschaft (1): 107–130.
Kaufmann, D., A. Kraay, and P. Zoido-Lobatón (2002). Governance Matters, II: Updated Indicators for 2001–02. World Bank, Washington, D.C. 〈http://www.worldbank.org/wbi/governance/govdata2001.htm〉.
Lee, J.-Y., and E. W. Mansfield (1996). Intellectual Property Protection and US Foreign Direct Investment.Review of Economics and Statistics 78 (2): 181–186.
Maskus, K. E. (1998). The International Regulation of Intellectual Property.Review of World Economics/Weltwirtschaftliches Archiv 134 (2): 186–208.
Maskus, K. E. (2000). Intellectual Property Rights and Foreign Direct Investment. Policy Discussion Paper 0022. University of Adelaide, Centre for International Economic Studies, Adelaide.
Maskus, K. E., and D. R. Eby-Konan (1994). Trade-Related Intellectual Property Rights: Issues and Exploratory Results. In A. V. Deardorff and R. M. Stern (eds.),Analytical and Negotiating Issues in the Global Trading System. Ann Arbor: University of Michigan Press.
Moran, T. H. (1998).Foreign Direct Investment and Development. The New Policy Agenda for Developing Countries and Economies in Transition. Washington, D.C.: Institute for International Economics.
Nicholson, M. (2003). The Impact of Industry Characteristics on International Technology Transfer. Federal Trade Commission. Washington, D.C.
Nunnenkamp, P., and J. Spatz (2002). Determinants of FDI in Developing Countries: Has Globalization Changed the Rules of the Game?Transnational Corporations 11 (2): 1–34.
Nunnenkamp, P., and J. Spatz (2003). Intellectual Property Rights and Foreign Direct Investment: The Role of Industry and Host-Country Characteristics. Kiel Working Paper 1167. Institute for World Economics, Kiel.
Primo Braga, C. A., and C. Fink (2000). International Transactions in Intellectual Property and Developing Countries.International Journal of Technology Management 19 (1/2): 35–56.
Smarzynska, B. K. (2004). The Composition of Foreign Direct Investment and Protection of Intellectual Property Rights: Evidence from Transition Economies.European Economic Review 48 (1): 39–62.
Smith, P. J. (2001). How Do Foreign Patent Rights Affect U.S. Exports, Affiliate Sales, and Licenses?Journal of International Economics 55 (2): 411–439.
WEF (World Economic Forum) (2002).The Global Competitiveness Report 2001–2002. New York: Oxford University Press.
White, H. (1980). A Heteroskedastic-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity.Econometrica 48 (4): 817–838.
World Bank (2002).World Development Indicators. CD-ROM. Washington, D.C.
Yang, G., and K. E. Maskus (2001). Intellectual Property Rights and Licensing: An Econometric Investigation.Review of World Economics/Weltwirtschaftliches Archiv 137 (1): 58–79.
Author information
Authors and Affiliations
Corresponding author
About this article
Cite this article
Nunnenkamp, P., Spatz, J. Intellectual property rights and foreign direct investment: A disaggregated analysis. Rev World Econ 140, 393–414 (2004). https://doi.org/10.1007/BF02665982
Issue Date:
DOI: https://doi.org/10.1007/BF02665982