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

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  • Smarzynska, Beata K.

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.

Suggested Citation

  • Smarzynska, Beata K., 2002. "The composition of foreign direct investment and protection of intellectual property rights : evidence from transition economies," Policy Research Working Paper Series 2786, The World Bank.
    • Handle: RePEc:wbk:wbrwps:2786
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    References listed on IDEAS

    as
    1. Guifang Yang & Maskus, Keith E., 2003. "Intellectual property rights, licensing, and innovation," Policy Research Working Paper Series 2973, The World Bank.
    2. Guifang Yang & Keith Maskus, 2001. "Intellectual property rights and licensing: An econometric investigation," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 137(1), pages 58-79, March.
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    6. Smarzynska, Beata K. & Shang-Jin Wei, 2000. "Corruption and the composition of foreign direct investment - firm-level evidence," Policy Research Working Paper Series 2360, The World Bank.
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    More about this item

    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;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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