Intellectual Property Rights and Economic Growth
We are grateful to an anonymous Referee, the Managing Editor, and Jesús Crespo-Cuaresma, Burcin Yurtoglu for many helpful comments and suggestions. Falvey and Greenaway gratefully acknowledge financial support from The Leverhulme Trust under Programme Grant F114/BF. Corresponding author: David Greenaway
Abstract
Interest in links between protection of intellectual property and growth has been revived by developments in new growth theory and by the WTO’s TRIPS Agreement. The relationship between the strength of a country’s intellectual property rights (IPRs) regime and rate of growth is ambiguous from a theoretical standpoint, reflecting the variety of channels through which technology can be acquired and their differing importance at different stages of development. We investigate the impact of IPR protection on economic growth in a panel of 79 countries using threshold regression analysis. We show that whilst the effect of IPR protection on growth depends upon the level of development, it is positively and significantly related to growth for low- and high-income countries, but not for middle-income countries. This suggests that, although IPR protection encourages innovation in high-income countries, and technology flows to low-income countries, middle-income countries may have offsetting losses from reduced scope for imitation.
