Abstract
We explore the relationship between intellectual property rights (IPR), the informal economy, and foreign direct investment (FDI) into developing countries. Intuitively, stronger IPR protection attracts more FDI in countries with small informal economies but not in countries with large informal economies. The intuition is that the informal economy is a proxy for the quality of institutions. In institutionally strong countries, IPR protection promotes FDI by reducing illegal imitation and freeing up more resources for MNCs. Our empirical analysis, based on a threshold effect model, provides some evidence supportive of our model.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.