Integrating intellectual property rights and development policy 11 introduction intellectual property is a form of knowledge which societies have decided can be assigned specific property rights. Intellectual property rights and economic growth by rod falvey. Innovation and intellectual property rights in the age of. Intellectual property rights and economic growth 165 as far as empirical evidence on the subject is concerned, only limited literature is available compared to that in other areas of economics. Diverse forms of intellectual property rights, innovations. Pdf the role of intellectual property rights in technology. This paper examines the growth effects of intellectual property right ipr protection in a qualityladder model of endogenous growth. The aim of this study, covering the period 20072014, is to examine the relationship between property rights and economic growth with the help of pardl in oecd and eu countries. Intellectual property ip is a category of property that includes intangible creations of the human intellect. Intellectual property rights create incentives for individuals and firms to. Innovation, economic development, and intellectual property rights by william daley, the fletcher school of law and diplomacy, tufts university introduction innovation is largely considered to be the principle catalyst of longterm economic growth. Intellectual property rights protection, ownership, and.
Intellectual property rights and economic growth request pdf. Appropriate intellectual property protection and economic. In the 1990s dozens of countries unilaterally strengthened their laws and regulations in this area, and many others are poised to do likewise. They have some resemblance to ownership rights over physical property or land. Chapter 10 the role of intellectual property in the economy. The protection of intellectual property rights has been considered as an engine of economic growth in developed and developing economies. This research seeks to know whethertightening intellectual property protection rights in a typical developing country such as nigeria can indeed promote innovation, attract foreign direct investment and invariably spur economic growth.
Intellectual property rights in the global creative economy message from the world economic forums global agenda council on the intellectual property system in this context, the world economic forums global agenda council on the intellectual property system seeks to raise. The legal devices that provide such control are called intellectual property rights. Interest in determining the relationship between economic growth and ipr has been invigorated by progression in new growth theory and trips falvey et al. The most wellknown types are s, patents, trademarks, and trade secrets. Powerhouse for innovation and economic growth governments all over the world are looking for ways to improve their economies, help their citizens and build national capabilities in many areas of technology, information and culture. Intellectual property rights and economic development carlos a. Primo braga carsten fink claudia paz sepulveda public disclosure authorized public disclosure authorized public disclosure authorized public disclosure authorized.
Protection of intellectual property ip, through patents, trademarks and s, is critical to ensuring that firms pursue innovation. An important question for many countries is whether stricter enforcement of intellectual property is a good strategy for economic growth. The wipo treaty and several related international agreements underline that the protection of intellectual property rights is essential to maintaining economic growth. Intellectual property rights and economic growth by rod.
Uniquely combining microeconomics, macroeconomics, and theory with empirical analysis drawn from the united states and europe, this book introduces graduate students and advanced. Park the center for intellectual property law, taiyuan university of science and technology, taiyuan, china, the w. We have looked about us to see what nations are the greatest, so that we can be like them. The economic case for strong protection for intellectual property. Forthcoming in the journal of international commerce, economics and policy, invited article for the special issue globalization and development. Evidences from high, middle and low income countries abdul sattar and tahir mahmood abstract. Innovation drives economic growth and job creation. Early precursors to some types of intellectual property existed in societies such as ancient rome, but the. The effectiveness of ipr on economic growth in different countries depends upon their various stages of development being measured in terms of per capita gdp. Role of intellectual property protection on economic growth. Intellectual property ip statistics and analysis oecd. This is where intellectual property rights iprs matter for economic development.
From development perspectives, recent literature has shifted attention to diverse forms of iprs in promoting innovation and growth. Impact of the intellectual property system on economic. The economic returns to creating them depend on their costs of creation, their desirability to potential users, the structure of markets in which they are sold, and the legal rights established to permit property owners to control their use. David audretsch, max planck institute of economics and indiana university. The protection of trade secrets has laid the foundation for the higher degree of protection of intellectual property rights between china and the united states. However, the debate surrounding it has become even more heated after the traderelated intellectual property rights trips agreement. Angela merkel, chancellor, federal republic of germany. Innovation, intellectual property, and economic growth. In 1900, korekiyo takahashi, the first president of the japanese. Pdf neoclassical growth theory emphasises the role of intellectual property rights iprs in the economic growth process through different channels. The chapter also looks at certain policy challenges in ensuring that intellectual property protection continues to promote u. Chinas rapid economic growth in the past thirty years raises questions about this view. A continental strategy for economic diversification through the afcfta and intellectual property rights.
The growing importance of knowledge and innovation has placed ip rights under the spotlight and highlighted the need to clearly assess how intellectual property interfaces with development in different socio economic contexts. This paper examines the role of intellectual property. In this context, the paper aims to confirm or reject statistically and econometrically the above finding, namely the contribution of intellectual property rights in economic growth for a group of. How private property protection influences the impact of. The economic case for strong protection for intellectual.
Intellectual property rights and economic development the case for and against private intellectual property rights 14 piprs as an incentive to generate new knowledge 15 piprs as an incentive to disclose new knowledge 18 problems with the. Impact of the intellectual property system on economic growth. Technological progress is a critical driver of economic growth, and one of the key determinants of technological change is the incentives we provide technology developers to innovate and disseminate their innovations. The new opportunities for the intellectual property rights. Nevertheless, evidence is emerging that stronger and more certain iprs could well increase economic growth and foster beneficial technical change, thereby improving development. Pdf intellectual property rights and economic growth. Survey on reforms towards ipbased economic development 2. Highlights this paper compares the roles of patent rights and utility model laws in the economic growth of countries at different levels of development. Innovation, economic development and intellectual property. Protecting intellectual property rights challenges, opportunities, and solutions june 2017. How private property protection influences the impact of intellectual property rights on economic growth. May 02, 2014 while there is strong evidence that robust intellectual property rights protection fosters economic growth and development, suspicion of stronger intellectual property rights remains front and. International trade, economic growth and intellectual. Variations in patent rights explain the innovation and economic growth of highincome economies, while variations in utility model laws explain those of middletolow income economies, controlling for other factors.
The analysis focuses on esfects of iprs on growth using a quantitative index of iprs. A panel data study of developed and developing countries patricia higino schneider department of economics, mount holyoke college, south hadley, ma 01075, usa received 1 may 2002. In 2012, the department of commerce issued a report titled intellectual property and the u. Jul 12, 2009 intellectual property ip is an umbrella term for various legal entitlements which attach to certain names, written and recorded media and inventions.
Innovation is key to economic growth, and the protection of that innovation, or intellectual property. The word ip refers to creation of the mind and expression. Intellectual property rights and economic growth theory while the discussion above suggests much about the interaction between intellectual property rights and innovation, little has been mentioned about the dynamic process of innovation, which is the backbone of many new theories of endogenous growth. This paper compares the roles of patent rights and. Economic growth with imperfect protection of intellectual. Following the conclusion of the trips agreement much has been written on the potential costs and benefits of stronger intellectual property rights iprs protection in terms of growth and technology transfer, particularly for developing countries. This paper studies the relationship between intellectual property rights iprs and economic growth for a cross. Intellectual property ip is an umbrella term for various legal entitlements which attach to certain names, written and recorded media and inventions. Pdf role of intellectual property protection on economic. The evidence suggests that intellectual property protection is a significant determinant of economic growth. Pdf economic growth and intellectual property rights. Ip also plays an important role in the creation, dissemination and use of new knowledge for further innovation, as contained in the inventions disclosed in patent. Legislative reform in the field of intellectual property, and the modernization of the ip infrastructures of many countries has. For instance, s are not only economically important, but a key.
Innovation the process through which new ideas are generated and successfully introduced in the marketplace is a primary driver of u. Jan 08, 2020 a continental strategy for economic diversification through the afcfta and intellectual property rights. Over the past 15 years, intellectual property rights iprspatents, s, and trademarkshave moved from an arcane area of legal analysis and a policy backwater to the forefront of global economic policymaking. Todays global intellectual property regimes have been strongly affected by the historical evolution of ipr in the united states and in the advanced industrialised. Intellectual property international chamber of commerce. Intellectual property rights, multinational firms and. Over the past decade, the production of intellectual property rights iprs has undergone tremendous changesfostered on the one hand, by a widening of the range of products and technologies covered by proprietary rights and on the other hand, by policy shifts that have initiated a move towards globally harmonized standards of protection. Agreement on traderelated intellectual property rights trips and the development of tripsplus standards. Intellectual property rights protection, ownership, and innovation. This chapter examines the role of intellectual property rights in economic growth, utilizing crosscountry data on patent protection, trade regime, and countryspecific characteristics. As allan, qian, and qian 2005 point out, china has achieved the fastest sustained growth in history. There is thus increasingly a common interest in promoting the protection of intellectual property rights and innovation. A continental strategy for economic diversification.
Nowhere is this more evident than in the area of intellectual property rights iprs. Todays global intellectual property regimes have been strongly affected by the historical evolution of ipr in the united states and in the advanced industrialised countries over the last century. Janjua and samad 2007 investigated the relationship between intellectual property rights and economic growth in middle east development countries using panel data analysis. Oct 25, 2006 this paper examines the growth effects of intellectual property right ipr protection in a qualityladder model of endogenous growth. Intellectual property is integral to our nations economic competitiveness and the growth of our innovative economy. Intellectual property rights and economic development. The analysis focuses on effects of iprs on growth using a quantitative index of iprs. However, stronger protection also gradually reduces the number of competitive sectors, in which innovation is easier than in monopolistic sectors. Chinas rapid economic growth in the past thirty years raises questions about this. The relationship between the strength of a countrys intellectual property rights iprs regime and its rate of growth is theoretically ambiguous, reflecting the variety of channels through which technology can be acquired and their differing importance at different levels of development. Traditional literature on the role of intellectual property rights iprs in innovation and economic growth tends to focus on the strength of ipr protection, given the tradeoffs between innovation and diffusion. Received 7 august 2007 received in revised form 30 october 2008. In addition to other factors, intellectual property rights.
Stronger ipr protection, which reduces the imitation probability, increases the reward for innovation. By influencing the incentives to innovate, intellectual property rights protection may affect economic growth in important ways. These arguments, based on endogeneous growth theory. As it will become clearer later in this paper, the role of intellectual property rights henceforth iprs in economic development has always been a controversial issue. Intellectual property rights protection and economic. Innovation, economic development, and intellectual property rights. Intellectual property ip rights aim to stimulate innovation by enabling inventors to appropriate the returns on their investments.
The impact of intellectual property theft on the economy. Innovation, economic development and intellectual property rights. But knowledge is much more than intellectual property. Patents, growth, and growing pains in 1900, korekiyo takahashi, the first president of the japanese patent office, announced during a visit to the us patent office. The protection of intellectual property rights is widely considered to be part of economic policymaking, although economic theories of growth and development. And do intellectual property rights help or hurt innovation and growth. Intellectual property rights, institutional quality and. Enquiries into intellectual propertys economic impact. Both patents and s were introduced in europe in the form of privileges that limited access to special classes of society. Franke college of business, northern arizona university, flagstaff, az, usa.
A continental strategy for economic diversification through. National intellectual property regimes and legislation 1. The role of intellectual property rights in economic growth. A component of the multidisciplinary oecd project new. Detractors of trips highlight the negative effects of strengthening intellectual property rights on economic development in developing countries, and the unfair gains for developed countries. International trade, economic growth and intellectual property rights. The wipo intellectual property handbook gives two reasons for intellectual property laws. Pdf economic growth and intellectual property rights protection. Conversely, supporters of trips stress the benefits emerging from the international harmonisation of intellectual property rights regimes for both developed. Protecting intellectual property rights challenges. By weaving together the links between intellectual property and innovative activity and their ultimate impact on growth, greenhalgh and rogers provide a new and original framework for guiding both public policy and future scholarship, one that is compelling and accessible.
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