Working Paper: CEPR ID: DP10602
Authors: Emmanuelle Auriol; Sara Biancini; Rodrigo Paillacar
Abstract: The paper studies developing countries' incentives to protect intellectual property rights (IPR). IPR enforcement is U-shaped in a country's market size relative to the aggregated market size of its trade partners: small/poor countries protect IPR to get access to advanced economies' markets, while large emerging countries tend to free-ride on rich countries' technology to serve their internal demand. Asymmetric protection of IPR, strict in the North and lax in the South, leads in many cases to a higher level of innovation than universal enforcement. An empirical analysis conducted with panel data covering 112 countries and 45 years supports the theoretical predictions.
Keywords: developing countries; imitation; innovation; intellectual property rights; oligopoly; trade policy
JEL Codes: F12; F13; F15; L13; O31; O34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| IPR protection (O34) | innovation (O35) |
| strict IPR enforcement in developed countries (O34) | increased innovation in developed countries (O39) |
| strict IPR enforcement in developed countries (O34) | decreased innovation in developing countries (O39) |
| size of a country's domestic market (F61) | strength of IPR protection (O34) |
| relative market sizes of countries (F61) | IPR protection (O34) |
| IPR protection (O34) | investment decisions (G11) |