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Modelling the impact of intellectual property protection and spillovers on attracting foreign direct investment

Po-Lu Chen

Economic Research-Ekonomska Istraživanja, 2022, vol. 35, issue 1, 622-636

Abstract: Previous studies yield ambiguous results from using country-level indices of intellectual property rights (I.P.R.) protections to test their relation to foreign direct investment (F.D.I.). This study develops a simple model featuring vertically linked stages of production to show that country-level I.P.R. indices might cause the ambiguity by ignoring differences in I.P.R. protection strength across industries. We demonstrate that industry-level I.P.R. indices resolve ambiguity over the empirical nexus between I.P.R. protections and F.D.I.

Date: 2022
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DOI: 10.1080/1331677X.2021.1931909

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