A Counterfactual Impact Analysis of Fair Use Policy on Copyright Related Industries in Singapore

Are more flexible fair use approaches, which require a test for determining whether new uses should be permitted, correlated with economic growth? Using the example of Singapore, we assess the extent to which fair use is related with growth in private copying technology and copyright markets. With reference to a differences-in-differences (DiD) methodology applied to the 2005 fair use amendments of the Singapore Copyright Act we test the law’s implications on private copying technology and copyright sectors in Singapore. The modifications of the Singapore Copyright Act were part of a set of changes of its Intellectual Property (IP) laws undertaken in the context of a Free Trade Agreement with the United States. Our findings seem to support the hypothesis that a more flexible fair use policy is correlated with faster growth rates in private copying technology industries. However, the counterfactual impact analysis did not support our second hypothesis, that flexible fair use policy would be correlated with higher growth in the copyright industries (indirectly via the growth of private copying technology industries). Thus, while the growth of copyright industries slowed down to a limited extent after 2005, the industrial group did not experience the degree of negative impact we expected. Moreover, this limited negative impact was offset by the positive impact of fair use policy correlated with higher growth in private copying technology industries. We caution that a counterfactual analysis cannot be used to attribute a causal relationship. It can only establish a correlation between a policy and a given outcome. Our findings must be read in this light. Further research, containing more comprehensive data sets and possibly also singling out international trade aspects, would benefit the debate on the interplay of copyright law and economic growth.