Premium
Does intellectual property lead to economic growth? Insights from a novel IP dataset
Author(s) -
Gold E. Richard,
Morin JeanFrédéric,
Shadeed Erica
Publication year - 2019
Publication title -
regulation and governance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.417
H-Index - 45
eISSN - 1748-5991
pISSN - 1748-5983
DOI - 10.1111/rego.12165
Subject(s) - intellectual property , context (archaeology) , incentive , order (exchange) , index (typography) , empirical evidence , causality (physics) , economics , value (mathematics) , developing country , lead (geology) , business , law and economics , industrial organization , public economics , international trade , microeconomics , political science , computer science , economic growth , law , paleontology , philosophy , physics , finance , epistemology , quantum mechanics , machine learning , world wide web , biology , geomorphology , geology
While policymakers often make bold claims as to the positive impact of intellectual property (IP) rights on both developed and developing country economies, the empirical literature is more ambiguous. IP rights have both incentive and inhibitory effects that are difficult to isolate in the abstract and are dependent on economic context. To unravel these contradictory effects, this article introduces an index that evaluates the strength of IP protection in 124 developing countries for the years 1995 to 2011. We illustrate the value of this index to economics study and show evidence that is consistent with IP leading to increased growth. Our results are further consistent with two causal pathways highlighted in the literature: that IP leads to greater levels of technology transfer and increased domestic inventive activity. Yet other aspects of our study fit uneasily with this simple story. For example, we find evidence suggesting that increased levels of growth lead to greater levels of IP protection, contradictory evidence in the literature linking IP with growth, a lack of evidence that increased levels of IP protection lead to actual use of the IP system, and problems with what IP indexes measure. Because of this, we suggest another – and so far undertheorized – explanation of the links between IP and growth: that IP may have few direct effects on growth and that any causality is a result of belief rather than actual deployment of IP.