Do intellectual property rights promote foreign direct investment inflows and technological exports in developing and developed countries?

Abstract

Purpose This study aims to analyse the intellectual property rights (INPR), foreign direct investment (FDI) inflows and technological exports of 32 developing and developed countries for the period of 2006–2020. Design/methodology/approach Diagnostic tests were used to confirm the panel least squares, fixed effect, random effect, feasible general least squares, dynamic ordinary least squares and fully modified ordinary least squares estimator results as well as to increase the robustness. Findings According to the findings for the developing countries, trademark, patent and industrial design applications, each had a significant positive long-run effect on FDI inflows. In addition, there was a significant positive long-run relationship between patent applications and medium- and high-technology exports. Meanwhile, trademark and industrial design applications had a significant negative long-term effect on medium- and high-technology exports. In developed countries, patent and industrial design applications each have a significant negative long-term on medium- and high-technology exports. Furthermore, patent and trademark applications each had a significant negative long-run effect on FDI inflows. Originality/value This study contributes significantly to the focus that host countries evaluate the technology gaps between domestic and foreign investors at different industry levels to select the best INPR rules and innovation process by increasing international cooperation. Furthermore, the host countries should follow the structure–conduct–performance paradigm based on analysis of the market structure, strategic firms and industrial dynamics systems.