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Can licensing induce productivity? Exploring the IPR effect

Author

Listed:
  • Gustavo Canavire-Bacarreza

    (Universidad Privada Boliviana (UPB)
    The World Bank)

  • Luis Castro Peñarrieta

    (Universidad Privada Boliviana (UPB)
    Centro de Investigación y Docencia Económicas, A.C. (CIDE))

Abstract

Licensing is one of the main channels for technology transfer from foreign-owned multinational enterprises (MNEs) to domestic plants. This transfer, occurring within and across industries, results in technology spillovers that may affect both intra- and interindustry productivity. Intellectual property rights (IPR) legislation may increase (or reduce) this effect. Using Chilean plant-level data for the 2001–2007 period and an exogenous variation from an IPR reform in 2005, we explore whether or not IPR affects the spillover effects of licensing on productivity. We find that stronger IPR reduces backward spillovers but increases forward spillovers. Moreover, the IPR legislation effect is stronger on firms that are on average smaller, and have low productivity. Our results are robust not only to a series of definitions of IPR, licensing, and productivity, but also to a set of different specifications.

Suggested Citation

  • Gustavo Canavire-Bacarreza & Luis Castro Peñarrieta, 2021. "Can licensing induce productivity? Exploring the IPR effect," Empirical Economics, Springer, vol. 61(2), pages 549-586, August.
    • Handle: RePEc:spr:empeco:v:61:y:2021:i:2:d:10.1007_s00181-020-01880-w
    DOI: 10.1007/s00181-020-01880-w
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    Cited by:

    1. Hu, Xiaotian & Yin, Xiaopeng, 2022. "Do stronger intellectual property rights protections raise productivity within the context of trade liberalization? Evidence from China," Economic Modelling, Elsevier, vol. 110(C).

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    More about this item

    Keywords

    Technology licensing; Productivity; Spillovers; Chile;
    All these keywords.

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • K2 - Law and Economics - - Regulation and Business Law

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