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FDI Inflows and Outflows, Intellectual Property Rights, and Productivity Growth

Discussion Papers

No.444

by Sasatra Sudsawasd and Santi Chaisrisawatsuk
February 2014

ABSTRACT

Using panel data of 57 countries during the period of 1995-2012, this study 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 IPR protection process. Our results suggest that better IPR protection is directly associated with productivity improvement only in developed economies. In addition, the contribution of IPR processes on growth through foreign direct investment (FDI) appears to be very limited. Only FDI inflows in developed countries which help to create a better innovative capability lead to a higher growth. And in connection with FDI outflows, only IPR protection and commercialization processes are proven to improve productivity in the case of developing countries, particularly when the country acts as the investing country.


Keywords: Foreign direct investment, Intellectual property rights, Productivity growth
JEL classification: F23, O34

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