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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.

Suggested Citation

  • Vladimir Popov, 2010. "Do We Need to Protect Intellectual Property Rights?," Working Papers w0161, Center for Economic and Financial Research (CEFIR).
  • Handle: RePEc:cfr:cefirw:w0161
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    References listed on IDEAS

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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.

    More about this item

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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