Composition of Foreign Direct Investment and Protection of Intellectual Property Rights in Transition Economies

Using a unique firm-level dataset this study shows that foreign investors in transition economies are characterized by low, rather than high, R&D intensity. It also finds that investors with higher R&D spending are more likely to engage in non-manufacturing projects than in local production. The empirical analysis links these results to weak protection of intellectual property rights (IPRs). It shows that weak protection deters foreign...