WASHINGTON, D.C., Nov. 6 -- The International Finance Corporation (IFC) has released a Discussion Paper entitled Intellectual Property Protection, Direct Investment, and Technology Transfer (IFC Discussion Paper No. 27 by Edwin Mansfield). The report analyzes a survey of major German, Japanese and American corporations on the importance they attach to intellectual property protection in making foreign direct investment decisions. The report concludes that improved intellectual property protection laws and their effective enforcement are likely to translate into significantly larger inflows of foreign direct investment. In addition, an econometric model is used to estimate the effects of the perceived strength or weakness of intellectual property protection in a developing country on the amount of U.S. foreign direct investment it receives. The report finds that in relatively high-technology industries like chemicals, pharmaceuticals, machinery, and electrical equipment, a country's system of intellectual prop
erty protection often has a significant effect on the amount and kinds of technology transfer and direct investment to that country. "Corporations are very selective when it comes to choosing whether to invest in one developing country destination over another," said Mr. Guy Pfefferman, Director of IFC's Economic Department. "Intellectual property rights are among the many levers governments in developing countries can pull in order to influence corporate decisions in favor of investing in their country." The report is a continuation of the analyses of an earlier study (IFC Discussion Paper 19, Intellectual Property Protection, Foreign Direct Investment and Technology Transfer, by Edwin Mansfield, 1994). Intellectual Property Protection, Direct Investment, and Technology Transfer (Discussion Paper No. 27) was written by Edwin Mansfield. IFC is a member of the World Bank Group and is the largest multilateral source of equity and loan financing for private sector projects in developing countries. (30) Press cop
ies may be ordered from Roderick Garnett by phone at (202) 473-7711 or by fax at (202) 676-0365. The general public may obtain copies through the World Bank bookstore at (202) 473-2941.
