How does the perception of intellectual property rights protection in China influence the foreign direct investment decisions of UK multi-national enterprises?

This PhD thesis considers the much researched, but little understood relationship between intellectual property rights (IPRs) and foreign direct investment (FDI). It employs a mixed methodology research design to answer the main research question, namely: 'How does the perception of intellectual property rights protection in China influence the foreign direct investment decisions of UK multi-national enterprises'. It examines aggregate data drawn from the FAME database, explores business decisions through an extensive survey of 205 senior executives of UK MNEs and draws specific understanding of the phenomenon through a series of nine follow-up interviews with executives. The paradox of China, with a poor reputation for IPRs, receiving large amounts of global FDI acts as a backdrop to this research. This research uses John Dunning's (1977) OLI framework to build its conceptual framework. The methodology employed allows for the disaggregation of companies and of FDI following the lead of Edwin Mansfield (1994) but, additionally, extends the taxonomy to services companies and to companies that both deliver services and manufacture products. This research has demonstrated that China's IPR system (including laws, regulatory system and enforcement) does impact the FDI decisions of UK MNEs. Evidence produced demonstrates that the perception of weak IPRs in China leads many companies to invest in lower quality FDI, invest with older technology or to choose not to invest in China. Additionally, the evidence produced shows that the mode of investment companies choose is impacted with wholly-foreign-owned entities preferred to joint ventures as a result of weaker IPRs. In addition, this research provides empirical evidence of internal company strategies to enable FDI in R&D facilities in countries with weaker IPRs, safely. The main contributions to knowledge of this thesis lie in the deeper understanding, through robust evidence, of the nature and behaviour of UK MNEs when operating in a country with weak IPRs. The thesis highlights the requirement to disaggregate companies and type of FDI when considering the FDI/IPR nexus and that a failure to do so may be the reason for previously mixed findings and a resulting unclear understanding of the IPR-FDI relationship in the existing literature. The key implications for policymakers flowing from this thesis are that better IPRs will improve the quantum and quality of FDI investments.