FDI, IPR protection and export quality: an empirical analysis based on national data
Nankai Business Review International
ISSN: 2040-8749
Article publication date: 21 November 2018
Issue publication date: 23 May 2019
Abstract
Purpose
With the focus on the impact of foreign direct investment (FDI) on export quality or of intellectual property rights (IPR) protection on export trade, there is little scholarly attention on how IPR protection affects the relationship between FDI and export quality. This study aims to examine the potential nonlinear dynamic threshold effect of IPR protection on the relationship between FDI and export quality. Distinguishing between developing and developed countries, the authors present an empirical analysis of the effects of FDI on export quality per degree of IPR protection.
Design/methodology/approach
Using panel data on 45 countries for the period from 1992 to 2014, we use a nonlinear dynamic panel threshold model to examine the effect of IPR protection on the relationship between FDI and export quality.
Findings
The authors find a triple threshold effect of IPR protection in both developing and developed countries. The three threshold values are larger for developed countries than for developing countries. The coefficients on the relationship between FDI and export quality per degree of IPR protection are larger in developing countries than in developed countries, except for high IPR protection. The results of the paper suggest that the effect of FDI on export quality differs greatly per degree of IPR protection. In both developing and developed countries, FDI impacts export quality most significantly under medium-high IPR protection. Having estimated the optimal range of IPR protection for attaining FDI in both groups of countries, policy recommendations are offered.
Originality/value
These findings not only contribute to the literature but also provide a view that a moderate level of IPR protection is conducive to attracting FDI and improving export quality.
Keywords
Acknowledgements
The authors would like to express their most sincere gratitude to fund project and their scientific research team. The team lays the foundation for their research and gives them valuable advice. They are also very grateful to the editors and anonymous reviewers for their valuable comments.
Citation
Zhang, H. and Xing, Y. (2019), "FDI, IPR protection and export quality: an empirical analysis based on national data", Nankai Business Review International, Vol. 10 No. 2, pp. 166-178. https://doi.org/10.1108/NBRI-12-2017-0071
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited