Jaffe department of economics dean of arts and sciences brandeis university october, 2007 1. 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. Pdf intellectual property rights and economic growth. I nd that a reduced collateral constraint leads to. 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. However, the debate surrounding it has become even more heated after the traderelated intellectual property rights trips agreement. The economic effect of the intellectual property obligations in free trade agreements mike palmedo draft, may 2012. Endogenous growth 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, technology and economic development.
May 06, 2005 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. In addition to other factors, intellectual property rights. In low income countries, this effect further weakens. Particularly for policy makers, it is important to understand whether agreements like trips could potentially harm growth in countries.
Intellectual property rights protection and economic growth. The role of intellectual property rights in economic growth. Hu department of economics national university of singapore and adam b. Intellectual property rights, multinational firms and.
In the 1990s dozens of countries unilaterally strengthened their laws and regulations in this area, and many others are poised to do likewise. Innovation, economic development, and intellectual property rights. Primo braga carsten fink claudia paz sepulveda public disclosure authorized public disclosure authorized public disclosure authorized public disclosure authorized. Innovation, economic development and intellectual property rights. The wipo treaty and several related international agreements underline that the protection of intellectual property rights is essential to maintaining economic growth. Innovation, economic development and intellectual property. Request pdf intellectual property rights and economic growth interest in links between protection of intellectual property and growth has been revived by. In this paper the authors consider the strength of the intellectual property. Considerations about intellectual property rights, innovation and economic growth in the digital economy carmen nadia ciocoiu1 abstract three technological trendsthe omnipresence of information in digital form, the generalised use of computer networks. There is currently a rich literature on the effect of trade and trade openness on economic growth. Financial development, intellectual property rights, and growth. Their decisions will be decisive in determining the ultimate distribution of gains and losses from the new global regime.
Intellectual property ip refers to the creation of mind. Thus, patents and s serve as tools to stimulate individual, firm, and industry level entrepreneurial ventures that feed into economic activities nationwide. Currently we know that much british ip is being acquired by organisations in china and the middle east, meaning the intellectual property rights are not being exploited for longterm commercial. The economic structure of intellectual property law. Economic foundations of intellectual property rights joseph e. This is where intellectual property rights iprs matter for economic development. One of the factors may be the intellectual property rights and the level of its protection. The relationship between intellectual property rights and economic development has attracted a. Chapter 10 the role of intellectual property in the economy. Intellectual property rights, technology and economic development experiences of asian countries the ongoing attempt to harmonise and strengthen the intellectual property protection ipp regimes worldwide, as part of the trips agreement, appears to be adversely affecting. 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. Journal of intellectual property rights vol 10, november 2005, pp 465473 role of intellectual property in economic growth kaushik laik the west bengal national university of juridical sciences, 12, lb block, sector iii, salt lake city, kolkata 700 098.
Interest in links between protection of intellectual property and growth has been revived by developments in new growth theory and by the wtos trips agreement. Appropriate intellectual property protection and economic. Introduction the interaction between intellectual property rights ipr and the rate and direction of technological. The chapter also looks at certain policy challenges in ensuring that intellectual property protection continues to promote u. The analysis focuses on esfects of iprs on growth using a quantitative index of iprs. Intellectual property rights in the global economy request pdf. This chapter examines the role of intellectual property rights in economic growth, utilizing crosscountry data on patent protection, trade.
Intellectual property rights and economic growth by rod. International trade, economic growth and intellectual. Intellectual property rights and economic development before considering how iprs influence economic activity and growth, consider their intended roles in the economy. Ipr, innovation, economic growth and development albert g. Rod and greenaway, david and fostermcgregor, neil, intellectual property rights and economic growth 2004. The legal devices that provide such control are called intellectual property rights. Intellectual property a power tool for economic growth. Overall, the positive impact of intellectual property rights to economic growth and development is encountered in countries with at least an average level of income. Interest in links between protection of intellectual property and growth has been revived by. The growth of human capital and the role of intellectual.
I realized, as i was beginning my work on the economics of information, that knowledge and information are very similar. At least one part of its industrial and economic success owes to. The protection of intellectual property rights has been considered as an engine of economic growth in developed and developing economies. 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.
This paper addresses the role of intellectual property rights iprs in the economic growth of countries at different levels of economic development. By influencing the incentives to innovate, intellectual property rights protection may affect economic growth in important ways. Commission on intellectual property rights study paper 1a intellectual property and economic development. The economic structure of intellectual property law landes, william m. 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. Economic analysis of iprs is utilitarian, asking whether the benefits of any system outweigh its costs, both in static and dynamic terms. 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. Intellectual property rights, technology and economic. Enquiries into intellectual propertys economic impact.
Intellectual property rights protection and economic. To further exploit the potential of their competitive advantage, producers need effective ways. Property rights and intellectual property protection, gdp growth and wellbeing in latin america. Financial development, intellectual property rights, and. Appropriate intellectual property protection and economic growth in.
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. 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. The role ofintellectualproperty rights ineconomic growth david gould, senioreconomist federalreserve bankofdallas and william c. Intellectual property a power tool for economic growth seeks to demystify intellectual property ip and to explain the why and the how of the subject. Stiglitz introduction my work in the economics of innovation began some forty years ago. This chapter examines the role of intellectual property rights in economic growth, utilizing crosscountry data on patent protection, trade regime, and countryspecific characteristics. A history of the ownership of ideas in the united states. Property rights and intellectual property protection, gdp growth. Government produced a report at this scale that details the nature and impact of intellectual property across the entire american economy. In this paper we endogenize the strength of the intellectual property rights institutions to study how incentives to protect and exploit property rights affect economic growth. There are many types of intellectual property, and some countries recognize more than others.
Stiglitz annual frey lecture february 16, 2007 introductory remarks its a pleasure to be here, at a university where so many people are interested in intellectual. Gruben, researchofficer federalreserve bankofdallas may 1994 research department working paper 9409 federal reserve bank of dallas. We have looked about us to see what nations are the greatest, so that we can be like them. 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.
Early precursors to some types of intellectual property existed in societies such as ancient rome, but the. Zorina khan department of economics 9700 college station bowdoin college brunswick maine usa 04011 and national bureau of economic research. Intellectual property rights and economic development carlos a. Intellectual property rights and economic growth 165 as far as empirical evidence on the subject is concerned, only limited literature is available compared to. The role ofintellectualproperty rights ineconomic growth. On the other hand, in lower middle income countries, due to poor protection of intellectual property rights, iprs have only moderate effect on economic growth. Received 7 august 2007 received in revised form 30 october 2008. Walter park, intellectual property rights and international innovation. Intellectual property rights and economic growth subject economics type of the work masters thesis date 21. This study employs a parsimonious model of economic growth to investigate the impact of intellectual property rights iprs protection on the economic growth of organization of the petroleum.
The wipo intellectual property handbook gives two reasons for intellectual property laws. Therefore, what is the ideal method to spur innovation. Intellectual property rights and economic development. The trips agreement represents a major increase in the global protection of intellectual property. Interactive effects of intellectual property rights and. The intellectual origins of modern economic growth joel mokyr the intellectual origins of the industrial revolution are traced back to the baconian program of the seventeenth century, which aimed at expanding the set of useful knowledge and applying natural philosophy to solve technological problems and bring about economic growth. The international political economy of intellectual. Next, the article highlights a key settlement in the history of intellectual property law and international trade. Intellectual property rights and economic growth by rod falvey. Pdf neoclassical growth theory emphasises the role of intellectual property rights iprs in the economic growth process through different channels. Intellectual property rights ipr, economic growth, north south model.
Integration on economic growth and welfare effects of. Endogenous strength of intellectual property rights. Intellectual property rights and economic growth request pdf. A number of interesting studies examine the relationship between property rights in general and economic growth torstensson, 1994, svensson, 1994, sachs and warner, 1995, as well as the specific relationship between intellectual property rights and economic growth gould and gruben, 1996, park and ginarte, 1997, thompson and rushing, 1999. Instead, in developing economies, a minor form of intellectual property rights iprs namely utility models is conducive to innovation and growth, controlling for other factors. 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. An important question for many countries is whether stricter enforcement of intellectual property laws is a good strategy for economic growth. The most wellknown types are s, patents, trademarks, and trade secrets. Intellectual property rights in the global economy. The economic effect of the intellectual property obligations in. A component of the multidisciplinary oecd project new. As far as econometric evidence is concerned, two studies show that patent rights contribute to economic growth, but they emphasize different mechanisms. The growth of human capital and the role of intellectual property rights in emerging economies daniel lederman.
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