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The Effect of European Intellectual Property Institutions on Chinese Outward Foreign Direct Investment

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  • Papageorgiadis, Nikolaos
  • Xu, Yue
  • Alexiou, Constantinos

Abstract

This study examines the role of the strength of the Intellectual Property (IP) institutions of 23 European countries in attracting Chinese Outward Foreign Direct Investment (OFDI) during the time period 2003–2015. Following a dynamic panel data analysis methodology, we find that the strength of IP institutions has a positive effect in attracting higher levels of OFDI from China. This is an important finding for the OFDI literature from emerging markets, since previous studies have researched this relationship from the OFDI perspective of developed countries. However, we also find a weak indication of a potential U-shaped relationship between the strength of IP institutions and Chinese OFDI. To better understand this relationship, we interact a European country's membership in the Former Eastern Bloc (FEB) with the strength of IP institutions and find a negative moderating effect. We therefore find that when investing in FEB countries, Chinese firms are attracted to weaker levels of IP institutional strength. The results of this study have important implications for future studies on the determinants of OFDI from emerging markets, as well as for European and Chinese businesses and policy-makers concerning the importance of IP institutional strength.

Suggested Citation

  • Papageorgiadis, Nikolaos & Xu, Yue & Alexiou, Constantinos, 2019. "The Effect of European Intellectual Property Institutions on Chinese Outward Foreign Direct Investment," Management and Organization Review, Cambridge University Press, vol. 15(1), pages 81-110, March.
    • Handle: RePEc:cup:maorev:v:15:y:2019:i:1:p:81-110_6
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    Cited by:

    1. Nasirov, Shukhrat & Gokh, Irina & Filippaios, Fragkiskos, 2022. "Technological radicalness, R&D internationalization, and the moderating effect of intellectual property protection," Journal of Business Research, Elsevier, vol. 145(C), pages 215-227.
    2. Chibuike Daraojimba & Abosede Olusade Kolade & Tochukwu Chinwuba Nwankwo & Mercy Odochi Agho & Chiedozie Marius Okafor, 2023. "A Review of Business Development Strategies in Emerging Markets: Economic Impacts and Growth Evaluation," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 10(9), pages 195-206, September.
    3. M. John Foster, 2023. "A fresh view of China’s OFDI, its motivations and risks thereto," SN Business & Economics, Springer, vol. 3(1), pages 1-19, January.
    4. Nemlioglu, Ilayda & Mallick, Sushanta, 2020. "Does multilateral lending aid capital accumulation? Role of intellectual capital and institutional quality," Journal of International Money and Finance, Elsevier, vol. 108(C).
    5. Huiying Zhang & Yikang Liu, 2022. "Do Foreign Direct Investment and Migration Influence the Sustainable Development of Outward Foreign Direct Investment? From the Perspective of Intellectual Property Rights Protection," Sustainability, MDPI, vol. 14(9), pages 1-18, April.
    6. Ming-Chang Huang & Tian-Jyun Gong & Shih-Ping Sun & Ping-Hsin Lin, 2023. "Obstacles or catalysts? A balanced view of formal institutional risks on FDI location choice," Asian Business & Management, Palgrave Macmillan, vol. 22(5), pages 2077-2105, November.
    7. Nikolaos Papageorgiadis & Chengang Wang & Georgios Magkonis, . "Factors contributing to the strength of national patent protection and enforcement after TRIPS," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
    8. Zhao, Shasha & Liu, Xiaohui & Andersson, Ulf & Shenkar, Oded, 2022. "Knowledge management of emerging economy multinationals," Journal of World Business, Elsevier, vol. 57(1).
    9. Sengupta, Aditi Sarkar & Kleindienst, Ingo & Hutzschenreuter, Thomas, 2023. "Heterogenous internationalization processes of emerging economy MNEs: A review and research agenda," Journal of International Management, Elsevier, vol. 29(3).
    10. Wang, Molin & Yan, Haifeng & Ciabuschi, Francesco & Su, Cong, 2023. "Facilitator or inhibitor? The effect of host-country intellectual property rights protection on China’s technology-driven acquisitions," International Business Review, Elsevier, vol. 32(6).
    11. Alexiou, Constantinos, 2023. "Gauging the impact of the strength of patent systems on renewable energy consumption," Renewable Energy, Elsevier, vol. 210(C), pages 431-439.
    12. Donnelly, Róisín & Manolova, Tatiana S., 2020. "Foreign location decisions through an institutional lens: A systematic review and future research agenda," International Business Review, Elsevier, vol. 29(4).

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