Innovation, Productivity and IPRs
We study the innovation, efficiency and productivity response to intellectual property (IP) reform vis-à-vis manufacturing industry in India. Studying the response of IP-sensitive industries relative to a control group of IP-insensitive industries, and using the fact that the IP reform was largely exogenously driven,we correct for confounding factors and endogeneity bias. We find a significant outward shift in the innovation frontier and consequent increase in productivity post-reform.This aggregate effect is driven by improvements in the non-electrical machinery industries, and to a lesser extent the drugs and pharmaceuticals sector.The comprehensive reforms notified 2003 provided the stimulus, rather than the token 1999 reform.
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