Intellectual Property Protection and the Geography of Trade

Abstract

This paper investigates how the implementation of intellectual property rights in developing countries under the 1995 TRIPS agreement affected trade in knowledge‐intensive goods. We compare trade in knowledge‐intensive goods with trade in other types of goods for 158 members and observers of the World Trade Organization from 1993–2009. Trade in knowledge‐intensive goods increased relative to a control group after TRIPS implementation. The increase in imports by developing countries was driven by exchange with high‐income countries and was concentrated in the information and communications technology sector. Our findings suggest that the effect of TRIPS on promoting knowledge diffusion from high‐income to developing countries varies by sector.