Intellectual Property Rights,<scp>FDI</scp>, R&amp;D and Economic Growth: A Cross‐country Empirical Analysis

Abstract

Abstract This paper aims to empirically examine how intellectual property rights ( IPR s) protection, foreign direct investment ( FDI ) and research and development (R&amp;D), along with other possible variables, may affect the economic growth of the host country. Using the panel data of 92 countries during 1970–2007, I conclude from the system generalised method of moments estimation that domestic investment share, FDI , R&amp;D capacity, openness to trade, human capital and IPR s protection all have statistically significant and positive impacts on economic growth. A further investigation of countries at different levels of development suggests two striking findings. First, besides the domestic investment, openness, human capital and IPR s protection, R&amp;D is the key to drive economic growth in the higher‐income countries, while FDI is the engine of growth in both higher‐income and middle‐income countries. Second, a positive and significant impact of IPR s protection on economic growth is found in both higher‐income and lower‐income countries. However, such an impact is not detected in the middle‐income countries.