Javorcik (2004)

From Copyright EVIDENCE

Advertising Architectural Publishing of books, periodicals and other publishing Programming and broadcasting Computer programming Computer consultancy Creative, arts and entertainment Cultural education

Film and motion pictures Sound recording and music publishing Photographic activities PR and communication Software publishing (including video games) Specialised design Television programmes Translation and interpretation

1. Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare 2. Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)? 3. Harmony of interest assumption between authors and publishers (creators and producers/investors) 4. Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption) 5. Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)

A. Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right) B. Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction) C. Mass digitisation/orphan works (non-use; extended collective licensing) D. Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability) E. Fair remuneration (levies; copyright contracts) F. Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Source Details

Javorcik (2004)
Title: The Composition of Foreign Direct Investment and Protection of Intellectual Property Rights: Evidence from Transition Economies
Author(s): Javorcik, B. S.
Year: 2004
Citation: Javorcik, B. S. (2004). The composition of foreign direct investment and protection of intellectual property rights: Evidence from transition economies. European economic review, 48(1), 39-62.
Link(s): Definitive
Key Related Studies:
Discipline:
Linked by:
About the Data
Data Description: 1405 firms that answered questions about their undertaken and planned investments in Eastern Europe and the former Soviet Union. The information collected mostly between 1989–1994.

Firms from the oil, gas, and coal sector were excluded from the sample.

Data Type: Secondary data
Secondary Data Sources:
Data Collection Methods:
Data Analysis Methods:
Industry(ies):
Country(ies):
Cross Country Study?: Yes
Comparative Study?: No
Literature review?: No
Government or policy study?: No
Time Period(s) of Collection:
  • 1989-1994
Funder(s):

Abstract

While existing literature examined the impact of intellectual property protection on the volume of foreign direct investment (FDI), little is known about its effect on the composition of FDI inflows. This paper addresses this question empirically using a unique firm-level data set from Eastern Europe and the former Soviet Union. It finds that weak protection deters foreign investors in technology-intensive sectors that rely heavily on intellectual property rights. Moreover, the results indicate that a weak intellectual property regime encourages investors to undertake projects focusing on distribution rather than local production.

Main Results of the Study

The paper tested two hypothesis:

  1. FDI in sectors relying heavily on protection of intellectual property is likely to be deterred by a weak IPR regime, not necessarily true for FDI inflows in general.
  2. In countries with weak protection of intellectual property, investors may be more inclined to engage solely in distribution activities rather than in local production.

Results:

  • Regarding the first hypothesis, the data indicates that investors in sectors relying heavily on protection of intellectual property are deterred by a weak IPR regime in a potential host country. There is also some evidence that weak

IPR protection may discourage all investors, not just those in the sensitive sectors.

  • Regarding the second hypothesis, the lack of IPR protection deters investors from undertaking local production and encourages them to focus on distribution of imported products. Interestingly, this effect is present in all sectors, not only those relying heavily on IPR protection

Policy Implications as Stated By Author

Increased IPR attracts FDI, so if developing countries wanted to increase FDI, they could increase the strength of their IPRs.



Coverage of Study

Coverage of Fundamental Issues
Issue Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
Green-tick.png
Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)?
Harmony of interest assumption between authors and publishers (creators and producers/investors)
Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption)
Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)
Coverage of Evidence Based Policies
Issue Included within Study
Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right)
Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction)
Green-tick.png
Mass digitisation/orphan works (non-use; extended collective licensing)
Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability)
Fair remuneration (levies; copyright contracts)
Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Datasets

Sample size: 1405
Level of aggregation: Firms
Period of material under study: 1989-1994