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Foreign Direct Investment, Intellectual Property Rights, and Productivity Growth

Author

Listed:
  • Sasatra Sudsawasd

    (School of Development Economics, National Institute of Development Administration (NIDA), 118 Seri Thai Road, Bangkapi, Bangkok 10240, Thailand)

  • Santi Chaisrisawatsuk

    (School of Development Economics, National Institute of Development Administration (NIDA), 118 Seri Thai Road, Bangkapi, Bangkok 10240, Thailand)

Abstract

Using panel data for 57 countries over the period of 1995–2012, this paper investigates the impact of intellectual property rights (IPR) processes on productivity growth. The IPR processes are decomposed into three stages — innovation process, commercialization process, and protection process. The paper finds that better IPR protection is directly associated with productivity improvements only in developed economies. In addition, the contribution of IPR processes on growth through foreign direct investment (FDI) appears to be quite limited. Only inward FDI in developed countries which creates better innovative capability leads to higher growth. In connection with outward FDI, only the increase in IPR protection and commercialization are proven to improve productivity in the case of developing countries, particularly when the country acts as the investing country.

Suggested Citation

  • Sasatra Sudsawasd & Santi Chaisrisawatsuk, 2014. "Foreign Direct Investment, Intellectual Property Rights, and Productivity Growth," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(03), pages 1-19.
    • Handle: RePEc:wsi:jicepx:v:05:y:2014:i:03:n:s1793993314400092
    DOI: 10.1142/S1793993314400092
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    References listed on IDEAS

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    1. Mila Kashcheeva, 2013. "The role of foreign direct investment in the relation between intellectual property rights and growth," Oxford Economic Papers, Oxford University Press, vol. 65(3), pages 699-720, July.
    2. Abdur Chowdhury & George Mavrotas, 2005. "FDI and Growth: a Causal Relationship," WIDER Working Paper Series RP2005-25, World Institute for Development Economic Research (UNU-WIDER).
    3. Ha-Joon Chang, 2001. "Intellectual Property Rights and Economic Development: Historical lessons and emerging issues," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 2(2), pages 287-309.
    4. Chin, J.C. & Grossman, G.M., 1988. "Intellectual Property Rigths And North-South Trade," Papers 143, Princeton, Woodrow Wilson School - Public and International Affairs.
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    Cited by:

    1. Zoran Aralica & Nebojša Stojčić, 2015. "Regional Patterns of Deindustrialization and Prospects for Reindustrialization in South and Central East European Countries," wiiw Balkan Observatory Working Papers 118, The Vienna Institute for International Economic Studies, wiiw.

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    More about this item

    Keywords

    Foreign direct investment; intellectual property rights; productivity growth; F23; O34;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • 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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