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Foreign direct investment in weak intellectual property rights regimes - the example of post-socialist economies

Johannes Stephan

Post-Communist Economies, 2011, vol. 23, issue 1, 35-53

Abstract: This analysis attempts to integrate international business theory on foreign direct investment (FDI) with institutional theory on intellectual property rights (IPR) to analyse FDI in Central and Eastern Europe, a region with an IPR regime gap vis-a-vis Western Europe. Starting from the premise that FDI plays a crucial role for technological catching up in Central and Eastern Europe (CEE) via technology and knowledge transfer, this article assesses the role played by IPR regimes as a factor for corporate governance and control of foreign-invested subsidiaries, for their own technological activity, their trade relationships, and networking for technological activity. As a specific novelty to the literature, the influence of the strength of IPR regimes on corporate control of subsidiaries is analysed. The results suggest that IPR-sensitive foreign investment tends to have lower functional autonomy, tends to cooperate more intensively within its transnational network and is still technologically more active than less IPR-sensitive subsidiaries.

Date: 2011
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DOI: 10.1080/14631377.2011.546973

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