Intellectual Property Rights and Economic Growth

20 Pages Posted: 19 Oct 2006

See all articles by Rod Falvey

Rod Falvey

Bond University - Department of Economics

David Greenaway

University of Nottingham - School of Economics

Neil Foster-McGregor

UNU-MERIT

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Abstract

Interest in links between protection of intellectual property and growth has been revived by developments in new growth theory and by the WTO's TRIPS Agreement. The relationship between the strength of a country's intellectual property rights (IPRs) regime and rate of growth is ambiguous from a theoretical standpoint, reflecting the variety of channels through which technology can be acquired and their differing importance at different stages of development. We investigate the impact of IPR protection on economic growth in a panel of 79 countries using threshold regression analysis. We show that whilst the effect of IPR protection on growth depends upon the level of development, it is positively and significantly related to growth for low- and high-income countries, but not for middle-income countries. This suggests that, although IPR protection encourages innovation in high-income countries, and technology flows to low-income countries, middle-income countries may have offsetting losses from reduced scope for imitation.

Suggested Citation

Falvey, Rod and Greenaway, David and Foster-McGregor, Neil, Intellectual Property Rights and Economic Growth. Review of Development Economics, Vol. 10, No. 4, pp. 700-719, November 2006, Available at SSRN: https://ssrn.com/abstract=938599 or http://dx.doi.org/10.1111/j.1467-9361.2006.00343.x

Rod Falvey (Contact Author)

Bond University - Department of Economics ( email )

Bond University - Department of Economics
Gold Coast, Queensland 4229
Australia

David Greenaway

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom
+44 115 951 5469 (Phone)
+44 115 951 4159 (Fax)

Neil Foster-McGregor

UNU-MERIT ( email )

Keizer Karelplein 19
Maastricht, 6211TC
Netherlands

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