A Comparative Analysis of Intellectual Property Rights: A case of Developed versus Developing Countries (original) (raw)
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Global Economic Review, 2017
This study documents a richer empirical look on the role of intellectual property rights (IPRs) on FDI inflows by considering global data including different income groups (i.e. high, middle, and low income groups classified by World Bank). It also looks at the (short-run) impact of the TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement which imposed during the Uruguay Round in 1995. The empirical model relates FDI inflows to IPRs, controlled by a set of known variables-GDP per capital, trade openness, real exchange rate, and real interest rate. The empirical computation covers panel data of between 35 and 100 countries for the period 1980-2014. The empirical results suggest cointegration (long-run relation) between IPRs and FDI inflow globally, regardless of different income groups. Their impact is estimated between 0.023 and 0.043, but insignificant in the short-run. Causality tests further support the role of IPRs on FDI. Various transmission channels have been identified, in particularly for low income countries. Positive finding is documented for the countries joining the TRIPS agreement. This study enlightens policymakers about the policy on creating a conducive and sustainable environment for IPRs in order to encourage FDI inflows to their countries. A small open economy in Asia-Malaysia is being considered as case study for Asian context.
Intellectual property rights, foreign direct investment and economic growth
2018
The objective of this study is to investigate the moderating role of IPR on the impact of FDI inflows on economic growth. By include an interaction term for FDI and IPR in each model, Two-step System GMM was applied for three proxies of IPR, namely patent, trademark and industrial design on a panel of 103 countries from 1998 to 2013. The result shows that interaction between FDI-trademark and FDI-design obtained a positive and significant result towards economic growth. It can be concluded that countries with high IPR’s could enhance their economic growth via higher inflows of FDI. A strict enforcement of IPR is vital in ensuring positive impact on economic growth as investors preferably place the FDI in a safe and secure nation that promises enforcement of law against imitation.
Intellectual Property Rights, Investment Climate and FDI in Developing Countries
International Business Research, 2010
What is the impact of intellectual property rights (IPR) protection on foreign direct investment (FDI)? Has the coming into effect of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) had any impact on FDI inflows in developing countries? This paper answers these questions by the use of panel data for a cross – section of 75 developing countries over a period of 19 years (1985 – 2003). The results of the study indicate that: 1) strengthening IPR has a positive effect on FDI; 2) the impact of patent protection on FDI after the TRIPS agreement is far and above that of the pre – TRIPS era; 3) the degree of openness, growth rate of the economy and investment are also key determinants of FDI. The findings of the study suggest that strengthening IPR is only one component of the many factors needed to maximize the potential of developing countries to attract FDI.
International Journal of Technology Management, 2000
This paper provides an overview of theoretical mechanisms by which the strength of an economy's intellectual property rights system could affect inward flows of foreign direct investment and technology licensing. It also reviews briefly the available econometric and survey evidence on these questions and lists new estimates suggesting that the international distribution of US investment in manufacturing is sensitive to variations in patent rights across countries. Intellectual property rights appear to be an important component of broader economic and regulatory policies in terms of attracting direct investment. However, concerns persist that stronger rights will reduce competition and access to information in developing economies as the new global system is phased in. Thus, the paper also discusses issues of competition policy that arise in the context of intellectual property protection.
Intellectual property rights protection and foreign direct investment: a study of BRICS countries
World Review of Entrepreneurship, Management and Sustainable Development, 2018
Economic implications of intellectual property rights protection have always been a matter of debate among policy makers. It is assumed that FDI inflow in any nation depends upon the level of protection given to the creation of intellectual capital. Studies conducted on developed nations built strong link between IPR protection and foreign direct investment. The debate centred on whether these results can be reciprocated for developing countries. This study adds new dimensions to the existing literature by analysing the impact of IPR protection on FDI inflow in BRICS nations with the help of country specific data for the period of 2000-2015. FDI inflow is considered as dependent variable and charges of IP use, patent granted, patent filed by residents, non-residents and R&D expenditure as the percentage of GDP as an independent variable and proxy to IPR protection. The empirical results suggest that charges of IP use, total patent granted and patent filed by non-residents affects FDI inflow. Further study concludes that stronger IPR protection in developing countries will infuse foreign direct investment in the technology oriented knowledge sectors where probability of loss due to imitation is high.
Intellectual property rights and foreign direct investment: A welfare analysis
European Economic Review, 2014
This paper reviews the theory and evidence on how intellectual property rights may influence decisions on FDI and technology transfers. The message is that, while there are indications that strengthening IPRs can be an effective incentive for inward FDI, it is only a component of a broader set of factors. Policy makers should recognize the complementarities among IPRs, market liberalization and deregulation, technology development policies, and competition regimes. These are complex issues, leading to complicated tradeoffs for market participants. Governments may wish to devote considerable attention and analysis to devising means for assuring their countries will achieve net gains from stronger IPRs and additional IPRs and licensing over time.
GGGI Management Review, 2016
In the globalizing economy, developing countries and those on the periphery of developing are moving to strengthen their S&T capabilities with the aim of reaching the status of emerging economies. Many of the technologies responsible for this transitional phase are bundle with policies that could either divert country resources or stimulate technological learning depending on the strength of intellectual property rights regime adopted. The recent WTO’s TRIPS Agreement seeks to encourage creations and inventions through various commercialization mechanisms with the adoption of a uniform policy. However, the agreement is tilted towards a single, strict and standardize document that equates all countries, irrespective of its economic demands and technological capabilities. This study attempts to differentiate the needs of developing countries through the analysis of FDI inflows and IP protection regimes: a) strong, b) weak. The paper is divided into two sections. The first part deals with foreign firms’ behaviors and investment towards varying degrees of IP protection in developing countries. The other section complements by detailing factors responsible for technology spillovers from MNCs. From the analysis, FDI inflows show a mixed result and do not necessarily increases as countries move towards stronger IPR protection due to Dunning’s three paradigms – Ownership, Localization & Internalization (OLI). More so, the tightening of IPR would stifle technology spillovers that are considered an essential component for stimulating local capabilities in developing countries. The paper further proposes for the adoption of flexible IPR regimes that is aligned on a country’s technological capability and innovative capacity similar to the Principle of Common but Differentiated Responsibilities and Respected Capabilities.
The Impact of Intellectual Property Rights on Economic Growth in the ECO Member Countries
2018
In recent years, supporting intellectual property right has gained more significance. Intellectual property rights could be considered as legal rights resulting from intellectual activities in industrial, scientific, literary and artistic fields. Today, many countries are seeking practical information about using intellectual property to improve economic growth. Intellectual property rights have an important role in long term, economic growth of communities so international institutions such as Global Business Organization and Global Intellectual Property Organization have been advising their members based on providing and reinforcing this determinate in recent years. Also the gap in intellectual property regimes among developed and developing countries is considered as one of the reasons of differences in economic growth and development in these countries. Intellectual property right is important from the viewpoint of developing countries and in relation with its impact and outcome...
2009
We integrate international business theory on foreign direct investment (FDI) with institutional theory on intellectual property rights (IPR) to explain characteristics and behaviour of foreign investment subsidiaries in Central East Europe, a region with an IPR regime-gap vis-à-vis West European countries. We start from the premise that FDI may play a crucial role for technological catch-up development in Central East