Investment‐Oriented Remittances Inflows and the Strength of Patent Right Protection in Developing Countries

ABSTRACT The present analysis has investigated the effect of investment‐oriented remittances (IOR) flows on the strength of patent right protection in developing countries. The analysis has relied on an unbalanced panel dataset of 88 countries over the period from 1970 to 2015. It has shown that higher IOR flows are associated with the betterment of patent right protection. The positive effect is larger in countries that had weaker patent right protection, as well as in those countries that improved their capacity to acquire the knowledge diffused by migrants residing abroad. Additionally, higher IOR flows have been associated with the weakening (strengthening) of patent right protection in poor countries (nonpoor countries) in the post‐Trade‐Related Aspects of Intellectual Property Rights (TRIPS) Agreement period compared to the pre‐TRIPS Agreement period. Finally, countries adopt stronger patent laws as they participate in a higher number of regional trade agreements.