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Do We Need to Protect Intellectual Property Rights?

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  • Vladimir Popov

    ()
    (New Economic School, Moscow)

Abstract

Strict protection of IPR can have a negative effect on economic development. Regression of economic growth on these indices produces conventional results (positive effect of stricter protection of IPR on growth) only if indices of institutional capacity (government effectiveness, control over corruption) are not included into the right hand side. If they are included, they kill the effect of IPR protection (because they are very much correlated with the IPR protection indices), so it is hardly possible to separate the effects of stricter IPR protection from the impact of the general strength of institutions. The same procedure was used to evaluate the impact of the IPR protection regime on the average share of R&D expenditure in GDP and the results were largely the same: without control for the institutional capacity, IPR protection seems to stimulate R&D, but after controlling for the institutional indices the effect disappears. There is also a strong negative effect of stricter regime of protection of IPR on the proliferation of the most crucial technology of recent decades – computers. The increase in the total number of PCs in 1995-2005, after controlling for the level of development, the size of the country and the institutional index, is negatively correlated with the IPR protection index. If piracy of intellectual products allows to overcome the negative impact of IPR protection on the dissemination of new technologies, it is reasonable to talk not about costs of piracy, but about the benefits of piracy and the costs of stricter IPR protection.

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Bibliographic Info

Paper provided by Center for Economic and Financial Research (CEFIR) in its series Working Papers with number w0161.

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Length: 38 pages
Date of creation: May 2010
Date of revision:
Handle: RePEc:cfr:cefirw:w0161

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  1. Popov, V., 2011. "Do We Need to Protect Intellectual Property Rights?," Journal of the New Economic Association, New Economic Association, issue 11, pages 107-126.
  2. Scotchmer, Suzanne, 2003. "The Political Economy of Intellectual Property Treaties," Berkeley Olin Program in Law & Economics, Working Paper Series qt9j50z2gz, Berkeley Olin Program in Law & Economics.
  3. Ha-Joon Chang, 2001. "Intellectual Property Rights and Economic Development: Historical lessons and emerging issues," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 2(2), pages 287-309.
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  8. Boldrin,Michele & Levine,David K., 2008. "Against Intellectual Monopoly," Cambridge Books, Cambridge University Press, number 9780521879286, November.
  9. Chu, Angus C. & Cozzi, Guido & Galli, Silvia, 2011. "Innovating like China: a theory of stage-dependent intellectual property rights," MPRA Paper 30553, University Library of Munich, Germany.
  10. Daron Acemoglu & Philippe Aghion & Fabrizio Zilibotti, 2003. "Vertical Integration and Distance to Frontier," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 630-638, 04/05.
  11. Furukawa, Yuichi, 2007. "The protection of intellectual property rights and endogenous growth: Is stronger always better?," Journal of Economic Dynamics and Control, Elsevier, vol. 31(11), pages 3644-3670, November.
  12. Pinelopi Koujianou Goldbe & Giovanni Maggi, 1997. "Protection for Sale: An Empirical Investigation," NBER Working Papers 5942, National Bureau of Economic Research, Inc.
  13. Ryo Horii & Tatsuro Iwaisako, 2005. "Economic Growth with Imperfect Protection of Intellectual Property Rights," Discussion Papers in Economics and Business 05-23, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  14. Polterovich, Victor & Popov, Vladimir, 2005. "Appropriate Economic Policies at Different Stages of Development," MPRA Paper 20066, University Library of Munich, Germany.
  15. Ha-Joon Chang, 2002. "Kicking Away the Ladder: An Unofficial History of Capitalism, Especially in Britain and the United States," Challenge, M.E. Sharpe, Inc., vol. 45(5), pages 63-97, September.
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  17. Daron Acemoglu & Ufuk Akcigit, 2006. "State-Dependent Intellectual Property Rights Policy," NBER Working Papers 12775, National Bureau of Economic Research, Inc.
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Cited by:
  1. Vladimir Popov, 2010. "Do We Need to Protect Intellectual Property Rights?," Working Papers w0161, Center for Economic and Financial Research (CEFIR).

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