Foreign direct investment in weak intellectual property rights regimes – the example of post-socialist economies

Stephan, Johannes

doi:10.1080/14631377.2011.546973

Cited by 3 publications

(3 citation statements)

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“…In this situation, FDI can play a vital role in bringing in many of these significant ingredients for private sector development and economic transition (Estrin, Richet, & Brada, 2000). Moreover, FDI can speed up the transition process and contribute to a host country's growth through the various spillovers and the know-how transfers which can be generated from the advanced technology brought in by foreign enterprises (Stephan, 2011), and by encouraging organizational restructuring which can provide more effective corporate governance (Cipollina, Giovannetti, Pietrovito, & Pozzolo, 2012;Djankov & Murrell, 2002). Therefore, among the many issues which the Syrian government needed to tackle after taking the transition decision, the attraction of more FDI inflows was a major priority.…”

Section: Reform Measures After the Transition Decision In 2005mentioning

confidence: 99%

Transition economies in the Middle East: the Syrian experience

Alajaty

Anchor

2018

Post-Communist Economies

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There have been no in depth studies of post Socialist transition in the Middle East. Syria's experience is a useful one to explore given its historically important role in the region and its distinctive characteristics. The Syrian economic transition, from the early 1990s to 2011, was in two phases: an incremental liberalisation phase and a transition to Social Market Economy phase. During both phases, Syrian policy makers showed a preference for a gradualist approach to economic transition, rather than a big-bang approach. This was facilitated by oil revenues and subsidies from the Gulf States. The Syrian experience therefore has its own distinct characteristics, as well as elements in common with the transitions in other post Socialist economies.

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Section: Reform Measures After the Transition Decision In 2005mentioning

confidence: 99%

Transition economies in the Middle East: the Syrian experience

Alajaty

Anchor

2018

Post-Communist Economies

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“…More importantly, only a handful of papers published more recently have started to explore the relationship between IPR protection and entry mode strategy of FDI (e.g., Stephan, 2011;Leahy & Naghavi, 2010). Entry mode choices with respect to WOS and JVs have been relatively absent from these discussions.…”

Section: Gaps In Prior Researchmentioning

confidence: 99%

“…Report is another measurement adopted in a number of IB studies (e.g. Stephan, 2011;Zekos, 2016;Watkins & Taylor, 2010;Chen, 2015). The Global Competitiveness Report is conducted annually by the World Economic Forum covering most economies around the world.…”

Section: The Section Of "Protection Of Intellectual Property" In the Global Competitivenessmentioning

confidence: 99%

The impacts of institutional differences in relation to intellectual property rights protection on foreign market direct investment: FDI inflows and modes of foreign market entry

Mo¹

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<p>This Master‘s thesis seeks to consider the impacts of institutional distance regarding IPR protection on Foreign direct investment’s (FDI) internationalization strategies. Estimated at approximately US$ 1.8 trillion in 2015 and sitting at its highest level since the global economic and financial crisis in 2008 (UNCTAD, 2016), FDI flows are fast becoming a focal issue of global business. Developing Asia, for example, has emerged as the world’s largest FDI recipient region in the world, which has attracted a wide and public attention. China, in particular, is the largest recipient of FDI among the emerging economies. In 2014, it overtook the US as the most popular destination for multinational enterprises (MNEs). To date, most academic interest has focused on how the institutional environment of the host country affects both the overall volumes of FDI (e.g., Lee & Mansfield, 1996; Smarzynska Javorcik, 2004), and the modes of entry strategy (e.g., McCalman, 2004; Dikova & Witteloostuijn, 2007). However, other areas of research also consider institutional distance, and the magnitudes and asymmetric effects of institutional distance (e.g., Cuervo-Cazurra & Genc, 2011; Phillips, Tracey, & Karra, 2009; Zaheer et al., 2012). In this context, this thesis, uses China as a sample of FDI recipient to seek to understand how the directions of institutional distance affect FDI’s flows and MNEs’ choice of entry mode into the host country. In particular, the research questions being addressed in this study are: (1) How does the bidirectional distance between home and host country regarding IPR protection affect FDI’s inflows to China? and (2) How does this bidirectional distance regarding IPR protection influence MNEs’ choice of entry mode? Using a quantitative research design, two dependent variables are examined in this study: FDI inflows and entry mode (wholly-owned subsidiaries (WOS) versus joint ventures (JVs)). Using the institutional theory as its theoretical underpinning, this study hypothesizes that IPR distance between home and host countries negatively affects FDI inflows to the host market. It also hypothesizes that IPR distance is positively related to MNEs’ choice of WOS as an entry mode as opposed to JVs. Both hypotheses build on the new notion regarding the directions of institutional distance that MNEs’ strategies and behaviours are divided into positive and negative directions. This consideration of directions of institutional distance differs to that of the general institutional approach, which typically clusters all regulative, normative and cognitive pillars within the institutional distance. However, this research focuses on the single regulative distance of IPR protection. Using the 691 collected observations of FDI flows to China from 2006 to 2012, hypothesis 1 was tested by employing the estimation techniques of panel linear regression. To further assess hypothesis 2, 801 instances of foreign market entry of FDI in China between 2008 and 2012 were analysed by logistic regression. From the panel linear regression model, the empirical results show that the larger the distance of IPR protection between home and host countries, the fewer the flows of FDI that entered into China. Such results are consistent with previous mainstream literature suggesting that greater institutional distance significantly diminishes the MNEs’ intentions to invest (e.g., Du, 2009; Berry et al., 2010). Moreover, logistic regression for hypothesis 2 reveals that IPR distance appears to be significantly and positively associated with the choice of WOS. This means that the tendency of MNEs from countries with a higher distance of IPR protection to enter China’s market by means of WOS (as opposed to JVs) will decrease. This result is in line with previous studies that note that larger institutional distance is associated with a lower level of equity ownership mode, such as JVs over WOS (e.g., Xu et al., 2004; Xu & Shenkar, 2002; Estrin et al., 2009). The greatest takeaway from this study is that it advances knowledge about the impact of the directions of IPR distance and provides new opinions on the debate around the asymmetric effect of institutional distance on internationalization decisions. This study also offers practical implications for both firm managers and public policy makers.</p>

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Regional conditions and innovation in Russia: the impact of foreign direct investment and absorptive capacity

Smith¹,

Thomas

2016

Regional Studies

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Foreign direct investment in weak intellectual property rights regimes – the example of post-socialist economies

Cited by 3 publications

References 26 publications

Transition economies in the Middle East: the Syrian experience

Transition economies in the Middle East: the Syrian experience

The impacts of institutional differences in relation to intellectual property rights protection on foreign market direct investment: FDI inflows and modes of foreign market entry

Regional conditions and innovation in Russia: the impact of foreign direct investment and absorptive capacity

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