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Intellectual Property Rights, Foreign Direct Investment and Economic Freedom

Author

Listed:
  • Saravia Antonio

    () (Mercer University, MaconGA, USA)

  • Canavire-Bacarreza Gustavo J.

    () (School of Economics and Finance, Universidad EAFIT, Medellin, Colombia)

  • Rios-Avila Fernando

    () (Levy Economics Institute of Bard College, Annandale-on-HudsonNY, USA)

Abstract

The relationship between intellectual property rights (IPR) protection and foreign direct investment (FDI) continues to pose a challenging puzzle. While several studies have found that these two variables are positively correlated, others have not been able to find conclusive results. We contend that a partial explanation resides on institutional differences among host countries. We find that increases in IPR protection encourage FDI in countries in which the institutional environment, as proxied by indices of economic freedom, is efficient but not otherwise. We use threshold regression techniques on samples ranging from 81 to 102 countries during the 1990 - 2010 period.

Suggested Citation

  • Saravia Antonio & Canavire-Bacarreza Gustavo J. & Rios-Avila Fernando, 2017. "Intellectual Property Rights, Foreign Direct Investment and Economic Freedom," Global Economy Journal, De Gruyter, vol. 17(2), pages 1-13, June.
  • Handle: RePEc:bpj:glecon:v:13:y:2017:i:1:p:13:n:8
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    References listed on IDEAS

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    1. Lee Branstetter & Kamal Saggi, 2011. "Intellectual Property Rights, Foreign Direct Investment and Industrial Development," Economic Journal, Royal Economic Society, vol. 121(555), pages 1161-1191, September.
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    Citations

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    Cited by:

    1. Luis Castro Peñarrieta & Gustavo Canavire-Bacarreza, 2017. "Can Licensing Induce Productivity? Exploring the IPR Effect," DOCUMENTOS DE TRABAJO CIEF 015809, UNIVERSIDAD EAFIT.
    2. Gustavo Canavire-Bacarreza & Luis Castro Peñarrieta, 2017. "Can IPR Affect MNE’s Entry Modes? The Chilean Case," DOCUMENTOS DE TRABAJO CIEF 015808, UNIVERSIDAD EAFIT.

    More about this item

    Keywords

    intellectual property rights; foreign direct investment; institutions; economic freedom;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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