The composition of foreign direct investment and protection of intellectual property rights: evidence from transition economies

Beata K. Smarzynska
Authors registered in the RePEc Author Service: Beata Smarzynska Javorcik ()

No 2786, Policy Research Working Paper Series from The World Bank

Abstract: 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.

Keywords: International Terrorism&Counterterrorism; Economic Theory&Research; Labor Policies; Environmental Economics&Policies; Legal Products; Trade and Regional Integration; International Terrorism&Counterterrorism; Legal Products; Environmental Economics&Policies; Economic Theory&Research (search for similar items in EconPapers)
Date: Written
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Journal Article: The composition of foreign direct investment and protection of intellectual property rights: Evidence from transition economies (2004)
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