Patent protection and foreign direct investment

Seyoum, Belay

doi:10.1002/tie.20101

Cited by 21 publications

(27 citation statements)

References 26 publications

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“…In addition, foreign investors, in all industries, tend to set up distribution facilities rather than engaging in local production in a country with weak IPR protection [60]. Four studies confirmed that MNEs prefer investing in the regions that have better intellectual property rights protection [61-63]. For example, a one point increase in IPR index would boost FDI by $1.5 billion [64].…”

Section: Resultsmentioning

confidence: 99%

A review of the health and economic implications of patent protection, with a specific focus on Thailand

Yamabhai

Smith

2012

Health Res Policy Sys

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BackgroundAlthough it has been two decades since the Thai Patent Act was amended to comply with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), there has been little emphasis given to assessing the implications of this amendment. The purpose of this review is to summarize the health and economic impact of patent protection, with a focus on the experience of Thailand.MethodsA review of national and international empirical evidence on the health and economic implications of patents from 1980 to 2009 was undertaken.ResultsThe findings illustrate the role of patent protection in four areas: price, present access, future access, and international trade and investment. Forty-three empirical studies were found, three of which were from Thai databases. Patenting does increase price, although the size of effect differs according to the methodology and country. Although weakening patent rights could increase present access, evidence suggests that strengthening patenting may benefit future access; although this is based on complex assumptions and estimations. Moreover, while patent protection appears to have a positive impact on trade flow, the implication for foreign direct investment (FDI) is equivocal.ConclusionsEmpirical studies in Thailand, and other similar countries, are rare, compromising the robustness and generalizability of conclusions. However, evidence does suggest that patenting presents a significant inter-temporal challenge in balancing aspects of current versus future access to technologies. This underlines the urgent need to prioritize health research resources to assess the wider implications of patent protection.

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Section: Resultsmentioning

confidence: 99%

A review of the health and economic implications of patent protection, with a specific focus on Thailand

Yamabhai

Smith

2012

Health Res Policy Sys

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“…Seyoum () tests the impact of IPRs on FDI across a random sample of 63 (developed and developing) countries for two time periods, 1990 and 1995. His model includes many theory‐based variables as controls.…”

Section: Empirical Evidence On the Impact Of Ipr Protection On Fdimentioning

confidence: 99%

“…The impact of IPR protection is positive and significant in both 1990 and 1995 (results partially contradicting those of Seyoum, ). Seyoum's () study would have benefited from the use of more granular data to establish if there is a difference in the importance of IPRs by sector or technological intensity, or to detect the impact of IPR protection on FDI driven by contrasting motives (e.g. market‐ or asset‐seeking).…”

Section: Empirical Evidence On the Impact Of Ipr Protection On Fdimentioning

confidence: 99%

What Do We Know About the Impact of Intellectual Property Rights on the Foreign Direct Investment Location (Country) Choice? A Review and Research Agenda

Noon

Vita

Appleyard

2018

Journal of Economic Surveys

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Despite a longstanding debate, at both a theoretical and empirical level, research on the relationship between foreign direct investment (FDI) and intellectual property rights (IPRs) remains scant and ambiguous. As a result, the link between IPR strength and multinational enterprises' (MNEs) propensity to invest is unproven and seemingly dependent on a number of factors. We critically review the theory and evidence of the influence of IPRs on FDI and MNEs' investment location (country) decisions both to 'take stock' of existing knowledge of this relationship and, by identifying gaps in, and shortcomings of prior work, develop a fruitful research agenda. We find that existing empirical work on the IPR-FDI nexus, though skewed in favour of a positive relationship between IPR protection and FDI, is fragmented, inconclusive and unable to square the conflicting theoretical predictions on how the strength of IPRs can affect MNEs' FDI location decisions. Several issues and challenges are highlighted to explain the difficulties of the collective body of past empirical work to provide a definite answer to the question of the impact of IPRs on FDI, from which valuable recommendations are proposed to guide future applied research.

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“…This is because strong IPR encourages holders of intellectual property to trade and invest, as adequate protection of IPR assure foreign investors that their technology will not be leaked to competitors. As a result, the smaller risk of imitation leads to a larger net demand for protected products (Mansfield, 1994;Seyoum, 2006). A country that enhances its IPR regime may attract additional knowledge intensive products, which will otherwise be unavailable on the local market or it may attract FDI; in either case, international technology transfer is likely to flow (Lippoldt, 2006).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Such advantages make it profitable to locate a business abroad. This means that FDI is not only "pushed" by firm specific advantages of the investor but may also be "pulled" to locations that are important sites of innovation activities (Seyoum, 2006). Further, it might be more profitable for the firm to internalize production rather than license or export goods on the open market.…”

Section: Literature Reviewmentioning

confidence: 99%