Intellectual Property Rights as Determinant of Foreign Direct Investment Entry Mode: The Case of Greece

Foreign direct investment continues to expand rapidly, enlarging the role of international production in the world economy. This expansion in business activity reflects trade and investment liberalization in many countries. The location decisions on FDI depend on a country's broader set of factors such as market openness and deregulation, competition regimes, development policies and intellectual property rights, that influence not only international foreign direct investment, trade but also the transfer of technology. Patents are one form of the exclusive intellectual property rights conferred by the state in order to promote science and technology. International technology transfer comes through three channels, FDI, joint ventures and licenses. The increase of international technological diffusion has enhanced the importance of intellectual property rights and particularly of patents. This paper aims at providing evidence linking the patent protection to technology transfer and inward foreign direct investment in different industry sectors in Greece. Strengthening Greece's IPR regime is seen as a prerequisite for the attraction of foreign multinationals to transfer technology, increasing the growth and the innovative activity. It also examines the role of other factors in attracting more FDI as the market openness, country risks and so on. A proper understanding of the above relationship will help firms and government to create appropriate intellectual property policy in order to encourage the growth and expansion of FDI in Greece.