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Intellectual Property Rights Enforcement and Industry Dynamics: Evidence from Indian Panel Data

Author

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  • Kartiki Verma

    (Department of Economics, Delhi School of Economics, University of Delhi)

  • Sunil Kanwar

    (Department of Economics, Delhi School of Economics, University of Delhi)

Abstract

This paper examines the impact of the strengthening of intellectual property rights (IPR) on industry-level outcomes such as sales, innovation, and profitability in India, for the period 1990-2020. We first construct a novel industry-specific IPR implementation index that reflects de facto enforcement across 27 two-digit industries. Industry outcomes are then modelled using industry data at the two-digit level. The empirical results reveal significant heterogeneity in the effects of IPR regimes. Stronger IPR protection disproportionately benefits firms with higher R&D intensity, amplifying both R&D investment and profitability, with robustness checks confirming consistency across alternative specifications. However, the gains from IPR protection are less pronounced for firms heavily engaged in innovation. This interaction may also reflect a strategic shift in firm behavior rather than a decline in performance. IPR reform positively affect R&D and profitability, particularly in pharmaceuticals and advanced manufacturing. The strengthening of IPR is a powerful driver of performance when paired with internal innovation capacity, highlighting the critical role of absorptive capacity.

Suggested Citation

  • Kartiki Verma & Sunil Kanwar, 2026. "Intellectual Property Rights Enforcement and Industry Dynamics: Evidence from Indian Panel Data," Working papers 360, Centre for Development Economics, Delhi School of Economics.
    • Handle: RePEc:cde:cdewps:360
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    Keywords

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    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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