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Impact of strengthening Intellectual Property Rights Regime on income inequality: An econometric analysis

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  • Saini, Swati
  • Mehra, Meeta K

Abstract

This paper examines the impact of strengthening Intellectual Property Rights (IPRs) on within-country income inequality for a cross-section of 65 developed and developing countries for the time period 1995-2009.Our results indicate that strengthening of IPRs has led to an increase in income inequality in WTO-member developing countries after they started modifying their national IPR regimes to conform to the TRIPs requirements. IPRs tend to raise income inequality by generating a more skewed distribution of wages. Stronger IPRs increase the demand for skilled labor force as it raises the return on R&D activities. This causes a relative increase in skilled labor wages, creating a wage bias in favor of skilled labor against unskilled labor, thus aggravating income inequality within a developing country. Moreover, the effect on inequality is more pronounced for developing countries that are experiencing higher per capita GDP growth rates. As for the developed countries included in the sample, the analysis seems to suggest that IPRs have led to a decline in income inequality over the study period.

Suggested Citation

  • Saini, Swati & Mehra, Meeta K, 2014. "Impact of strengthening Intellectual Property Rights Regime on income inequality: An econometric analysis," MPRA Paper 56710, University Library of Munich, Germany, revised 12 Jun 2014.
  • Handle: RePEc:pra:mprapa:56710
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    Keywords

    Developing countries; Globalization; Inequality; Intellectual Property Rights;

    JEL classification:

    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • 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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