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

By Beata K. Smarzynska. 2002

643 citations recorded by the source corpus.

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.

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/b681d5fb428dee0d42558fd2c860723c9fe6a3ae

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Citations in the corpus

Roll Out the Red Carpet and They Will Come: Investment Promotion and FDI Inflows† (2011, background): “…foreign direct investment and other capital inflows from abroad.7 The negative impact of corruption on investment flows has been documented in a number of studies including Wei (2000a,b), Javorcik (2004b) and Javorcik and Wei (2009), to name just a few.8 This study is structured as follows.”
Intellectual Property Rights, Foreign Direct Investment, and Industrial Development (2011, neutral): “…a more mixed picture: while Mayer and P ster (2001) nd a negative e¤ect of stronger patent rights on location decisions of French multinationals, Javorcik (2004) nds that stronger patent rights in Eastern Europe and former Soviet Union states have a positive e¤ect on FDI in high-technology…”
Does Enforcement of Intellectual Property Rights Matter in China? Evidence from Financing and Investment Choices in the High-Tech Industry (2014, positive): “Existing empirical evidence suggests a positive effect of the extent of IP laws on GDP growth (Gould and Gruben, 1996), direction of technical change (Moser, 2005), and foreign direct investment (Javorcik, 2004; Du et al., 2008).”
Do Stronger Intellectual Property Rights Increase International Technology Transfer? Empirical Evidence from U.S. Firm-Level Panel Data (2006, neutral): “10 One recent exception is Smarzynska (2000), who examines the composition of FDI in Eastern Europe in the 1990s and relates this composition to differences across countries in IPR regimes.”
Why is there a lack of evidence on knowledge spillovers from foreign direct investment (2018, positive): “…channels of backward linkages are direct knowledge transfer, higher requirement for product quality and on-time delivery introduced by MNCs and the fact that the MNC entry can increase demand for intermediate goods (Javorcik, 2004; Lall, 1980: Smarzynska, 2003; Markusen and Venables, 1999).”
International patent protection: 1960-2005 (2008, background): “…and Chen and Puttitanun (2005); for international trade and PR, see Smith (1999) and Co (2004); for international technology ransfer and IPR, see Javorcik (2002), Park and Lippoldt (2005), and ranstetter et al. (2006); and for the effects of IPR on productivity rowth, see Falvey et al. (2006).”
Multinational corporations’ economic and human rights impacts on developing countries: a review and research agenda (2014, background): “Some econometric studies find evidence of positive spillovers for domestic firms (see among others, Kokko, 1994; Blomstrom et al., 1994 for Mexico; Sjoholm, 1999 for Indonesia; Javorcik, 2004b for Lithuania; Takii, 2005 for Indonesia; Wei and Liu, 2006 for China; Javorcik and Spatareanu, 2009 for th”
Economic upgrading through global value chain participation: which policies increase the value-added gains? (2017, methodology): “These findings support studies that find that better institutions (Javorcik 2004b, Gorodnichenko, Svejnar, and Terrell 2007) and more competition (Sinani and Meyer 2004)—are beneficial for productivity spillovers from FDI.”
Determinant Factors of FDI Spillovers – What Do We Really Know? (2007, methodology): “Javorcik (2004b), using data for Lithuania, finds some (weak) evidence to suggest that FDI projects oriented towards the domestic market generate more spillovers.”
The FDI location decision: does liberalization matter? (2007, background): “Weak property rights are a considerable disincentive to FDI (Oxley, 1999; Smarzynska, 2002), whilst corruption is analogous to a tax as it raises the costs of doing business and has been negatively linked to FDI flows (Grosse and Trevino, 2005).”
Multinational Firms and International Business Cycle Transmission (2016, background): “6See for example Javorcik (2004), Guadalupe et al. (2012), and Fons-Rosen et al. (2013).”