Does the Protection of Foreign Intellectual Property Rights Stimulate Innovation in the US?

14 Pages Posted: 1 Nov 2010

See all articles by Larry D. Qiu

Larry D. Qiu

The University of Hong Kong - Faculty of Business and Economics; Hong Kong University of Science & Technology (HKUST) - Department of Economics

Huayang Yu

affiliation not provided to SSRN

Abstract

Although standard theories suggest that patent protection helps stimulate innovative activities, some new theories argue the opposite. Empirical studies do not generate conclusive results either. This paper investigates empirically the impacts of foreign patent reforms on innovation in the US, using data on successful patent applications in the US over 33 years and major IPR reforms in 21 countries, in addition to the patent reforms in the US and the TRIPS Agreement of the WTO. We find that the TRIPS Agreement has had significant impacts on innovation in the US, which highlights the importance of international cooperation in patent protection. However, the effects of strengthening patent protection by individual countries are not statistically significant. This result seems to imply that the US market is already sufficiently large/profitable to provide innovation incentives in the US and therefore further strengthening foreign patent protection simply increases the US innovators' rent, but not their innovation.

Suggested Citation

Qiu, Larry Dongxiao and Yu, Huayang, Does the Protection of Foreign Intellectual Property Rights Stimulate Innovation in the US?. Review of International Economics, Vol. 18, Issue 5, pp. 882-895, November 2010. Available at SSRN: https://ssrn.com/abstract=1699941 or http://dx.doi.org/10.1111/j.1467-9396.2010.00914.x

Larry Dongxiao Qiu (Contact Author)

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong
China

Hong Kong University of Science & Technology (HKUST) - Department of Economics ( email )

School of Economics and Finance
University of Hong Kong
Pokfulam
Hong Kong

HOME PAGE: http://www.bm.ust.hk/~larryqiu/

Huayang Yu

affiliation not provided to SSRN

No Address Available

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