| This dissertation examines factors influencing international flows of capital and goods. Its first two parts focus on foreign direct investment (FDI), while the third one is devoted to international trade.; Using a unique firm-level data set, the first chapter shows that foreign investors in Eastern Europe and the former Soviet Union are characterized by low, rather than high, R&D intensity. Moreover, investors with higher R&D spending tend to engage in non-manufacturing projects rather than in local production. The empirical analysis links these findings to weak protection of intellectual property rights (IPRs). It indicates that weak protection deters investors, especially those in technology-intensive sectors that rely heavily on IPRs. It also encourages non-manufacturing projects and discourages local production. Thus, this study provides empirical evidence that IPR protection affects the composition of FDI inflows.; The second chapter analyzes characteristics of foreign investors using different entry modes. Unlike earlier research, if focuses on intra- rather than interindustry differences. It postulates that while technological leaders in any industry enjoy a greater bargaining power and can secure more favorable terms of joint ventures (JVs), they are also more concerned about knowledge dissipation resulting from shared ownership. The empirical analysis supports the hypothesis. It shows that in low technology sectors, where losing intangible assets is not a severe threat, investors with above average R&D intensity prefer JVs to greenfield entry, while the opposite is true in high technology industries. The study concludes that industry structure affects the choice of entry mode and that JVs present a potential for transferring state-of-the-art technologies in low R&D sectors.; The last chapter extends the gravity model to include a new measure of the trading partners' location relative to other countries. The proposed measure, based on the concept of the world trade center, is statistically significant in a model estimated for OECD countries. The hypothesis that two countries located at the periphery are more reliant on bilateral trade than two centrally located economies finds empirical support. The study shows that omitting the location measure influences the estimated effects of regional country groupings and thus may lead to incorrect policy conclusions. |
