WPS 14-03: How Private Property Protection Influences the Impact of Intellectual Property Rights…

Posted: Monday, April 28th 2014 at 2:50 PM

Title:

How Private Property Protection Influences the Impact of Intellectual Property Rights on Economic Growth

Authors:

Ding Du
Walter G. Park


Abstract

Although policy makers typically assume a positive relationship between intellectual property rights (IPRs) and economic growth, the empirical evidence on the IPR-growth relationship is rather inconclusive (e.g. Andersen and Konzelmann, 2008). We conjecture in this paper that the weak IPR-growth evidence in previous studies may be due to a neglect of the role of finance markets and private property rights. Our conjecture is motivated by the recent law and finance literature. We test our conjecture with a cross-section of 98 countries and find that once we modify our measure of IPRs to take into account general property rights, there is stronger evidence for a positive relationship between IPRs and economic growth. Our findings not only help explain the IPR-innovation puzzle in Lerner (2009), among others, but also have significant theoretical as well as policy implications.

JEL Codes: O40, O34, K11

Keywords: Intellectual property rights; Private Property Protection; Economic Growth; Quantile regression

WPS 14-03 April 2014

PDF of working paper HERE.



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