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Intellectual Property Protection and Technology Licensing: The Case of Developing Countries

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  • Sunil Kanwar

Abstract

This paper studies the influence of stronger patent protection on technology licensing. Using data for the post-Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) period and focusing on developing countries, I correct for any endogeneity biases that may bedevil estimation. Employing a more inclusive index of patent protection than hitherto, which better accounts for the enforcement and implementation environment, I find that stronger protection is associated with increased royalty and license fee payments, which implies greater technology transfer to developing countries. The significance of the protection variable is driven by the subindex of patent coverage, which makes eminent sense in view of the increase in the coverage of patentable matter by developing countries after TRIPS. The economic significance of the protection variable is also substantial, with ceteris paribus changes in this variable accounting for technology inflows of U.S.$2.5-$3.2 billion (base year 2000) in the post-TRIPS sample period.

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  • Sunil Kanwar, 2012. "Intellectual Property Protection and Technology Licensing: The Case of Developing Countries," Journal of Law and Economics, University of Chicago Press, vol. 55(3), pages 539-564.
  • Handle: RePEc:ucp:jlawec:doi:10.1086/665566
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    Cited by:

    1. Christine Greenhalgh, 2016. "Science, technology, innovation and IP in India: new directions and prospects," Economic Change and Restructuring, Springer, vol. 49(2), pages 113-138, August.
    2. Giuseppe Vita, 2016. "International strengthen of intellectual property rights, and financial markets development," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 40(1), pages 60-67, January.
    3. Ming Liu & Sumner la Croix, 2013. "A Cross-Country Index of Intellectual Property Rights in Pharmaceutical Innovations," Working Papers 201313, University of Hawaii at Manoa, Department of Economics.
    4. Iftekhar Hasan & Fahad Khalil & Xian Sun, 2017. "The Impacts of Intellectual Property Rights Protection on Cross-Border M&As," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 7(03), pages 1-35, September.
    5. Sunil Kanwar, 2013. "Innovation, Productivity and IPRs," Working papers 230, Centre for Development Economics, Delhi School of Economics.
    6. Suma Athreye & Sandeep Kapur, 2015. "Capital and Technology Flows: changing technology-acquisition strategies in developing countries," Birkbeck Working Papers in Economics and Finance 1511, Birkbeck, Department of Economics, Mathematics & Statistics.
    7. Sunil Kanwar, 2013. "Innovation, Efficiency, Productivity and Intellectual Property Rights: Evidence from a BRIC Economy," Working Papers id:5375, eSocialSciences.

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