DOES FOREIGN INTELLECTUAL PROPERTY RIGHTS PROTECTION AFFECT US EXPORTS AND FDI?

Several previous studies have examined the relationship between intellectual property rights (IPR) protection, exports, and FDI independently. However, very few prior analyses jointly examined the linkages between IPR protection and multiple modes of international transactions. This paper investigates how foreign IPR protection affects how US firms jointly serve overseas markets through exports and FDI. Using both static pooled regressions and a dynamic panel GMM estimator on a panel data of 53 countries, we examine whether stronger foreign IPR protection stimulates US international transactions. The empirical results suggest that foreign countries that strengthen their IPR protection, especially those with strong imitative ability, can attract more international transactions from the USA.