IPR Law Protection and Enforcement and the Effect on Horizontal Productivity Spillovers from Inward FDI to Domestic Firms: A Meta-analysis

Danai Christopoulou,Georgios Magkonis,Chengang Wang,Nikolaos Papageorgiadis

doi:10.1007/s11575-021-00443-0

Abstract

We study the role of the strength of Intellectual Property Rights (IPR) law protection and enforcement in influencing horizontal productivity spillovers from inward FDI to domestic firms in host countries. While most WTO countries adopted strong IPR legislation due to exogenous pressure resulting from the signing of the Trade-Related Aspects of IPR (TRIPS) agreement, public IPR enforcement strength continues to vary significantly between countries. We meta-analyse 49 studies and find that public IPR enforcement strength has a direct positive effect on horizontal productivity spillovers from inward FDI to domestic firms and a negative moderating effect on the relationship between IPR law protection strength and horizontal productivity spillovers from inward FDI to domestic firms.

Highlights

This study investigates the role of national Intellectual Property Rights (IPR) systems and the strength of IPR law protection and the effectiveness of public IPR enforcement in stimulating horizontal productivity spillovers from inward Foreign Direct Investment (FDI) to domestic firms
With regards to the results in relation to hypothesis 1, we find that the strength of IPR law protection has a positive and statistically significant (4.097, p < 0.001 in Model 1) effect on inward FDI horizontal productivity spillovers to domestic firms
This result challenges the findings of the previous meta-analytic study by Iršová and Havránek (2013) who found that the IPR law protection reduces the magnitude of inward FDI horizontal productivity spillovers to domestic firms and Smeets and de Vaal (2016) who found an insignificant relationship

Summary

Introduction

This study investigates the role of national Intellectual Property Rights (IPR) systems and the strength of IPR law protection and the effectiveness of public IPR enforcement (e.g., judiciary, customs) in stimulating horizontal productivity spillovers from inward Foreign Direct Investment (FDI) to domestic firms. Foreign MNEs are more likely to transfer high value technological IPR assets in countries where IPR protection is strong and public enforcement is effective. This in turn will impact the productivity of domestic firms through technology licensing and/or spillovers via e.g., observation and imitation (Berry 2017; Pavlínek and Žížalová 2014). The available laws related to the enforcement of IPR may not provide a range of legal options to IPR enforcement agents to carry out their operations effectively This can relate to the potential lack of legislation that allows IPR enforcement agents to award and enforce preliminary injunctions in IPR infringement cases

Methods

Results

Conclusion