The effect of intellectual property rights on foreign direct investment: a study on developing countries

In this work, the aim is to understand the importance of those factors that affect the Foreign Direct Investments (FDI), especially Intellectual Property Rights (IPRs) in terms of the developing countries? perspective. Through the research in addition to IPRs some other economical variables were also examined. As an indicator for IPR the index developed by Ginarte and Park that includes factors like international treaties and juristic structure of protective infrastructure has been used. Freedom Index (FI) consist of ten components has been replaced as another indicator for IPRs. It was examined that if any differentiation of attracting FDI exist between lower-middle-income and upper-middle-income countries through components of FI. The panel data analysis prevailed that further steps to protect intellectual property rights may enhance FDI. This analysis also suggests that GDP per capita (purchasing power parity), external depth stock (publicly guaranteed), reserves (including gold), openness to trade, and growth could be effective on the FDI.