The Relationships Between Intellectual Property Strength And FDI

With the continuous development of economic integration,FDI,due to its positive effects on the host country’s economy,has attracted more and more attention from various countries.However,many theories on international direct investment emphasize that the intellectual assets of transnational corporations are crucial to the occurrence of FDI.The TRIPs agreement in 1995 set off a small climax of the research on the impact of intellectual property protection on FDI.However,up to now,intellectual property protection has not yet formed a unified conclusion on the action direction of FDI.From the perspective of different impacts on FDI from the strengthening of intellectual property protection between developed countries and developing countries,this paper proposes the hypothesis that strengthening intellectual property protection increases foreign direct investment between developed countries and developing countries,but the positive effect on FDI in developing countries is weaker than that of developed countries.To test this hypothesis,we combine theory with econometrics.Theoretically,it constructs the theoretical mechanism of different influences of intellectual property protection on developed and developing countries.Theoretical mechanism is as follows: for the developed countries and developing countries,to strengthen the protection of intellectual property rights are to strengthen the ownership advantages and location advantages,strengthen the location advantage of FDI produced positive influence of market expansion,and to strengthen the ownership advantages of FDI has a different effect: for developed countries,to strengthen the ownership of the advantages of vertical FDI and horizontal FDI have the positive influence of market expansion;For developing countries,strong intellectual property protection has a negative impact on horizontal FDI market monopoly and a positive impact on vertical FDI market expansion.In terms of econometrics,using the data of American outward investment and the measurement method of static panel,this paper verifies the hypothesis that strengthening intellectual property protection increases the FDI of developed anddeveloping countries,but the positive effect on FDI of developing countries is weaker than that of developed countries.Then,the panel data of 147 countries from 2006 to 2015 of the United Nations conference on trade and development were used to distinguish different types of countries and verify the different impacts of intellectual property protection on FDI in developed and developing countries respectively.Among different types of countries,One Belt And One Road is used by relevant countries to prove that the promotion effect of strengthening intellectual property protection on FDI in developing countries is weaker than that in developed countries.The last part is the policy recommendations of this paper.Developed countries can adopt strong intellectual property protection policies to attract FDI.Developing countries,on the other hand,should distinguish between low-tech economies and medium-tech economies,and adopt appropriate intellectual property rights protection for developing countries with different technological levels.