International Licensing and the Strengthening of Intellectual Property Rights in Developing Countries During the 1990s

Abstract

This paper assesses the effect of strengthened intellectual property rights in developing countries on international licensing activity. The analysis draws on indicators for four dimensions of intellectual property right stringency (covering patent rights, copyrights and trademark rights, as well as enforcement effectiveness) and on firm-level data related to licensing. Overall, the analysis points to a net positive effect of IPR strength on licensing activity, an effect that is strongest with respect to the indicators for patent rights and effective enforcement. Where developing countries have moved to address weaknesses in these areas in recent years, they have tended to experience increased inward licensing of intellectual assets. The overall implication is that intellectual property rights can play an important role in enabling firms in developing nations to access and exploit technologies and know-how through licensing agreements with parties in developed nations.

Keywords: Intellectual property, licensing, economic development

JEL Classification: O31, O34, F43