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Intellectual Property Rights as Development Determinants

Author

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  • Theo S Eicher
  • Monique Newiak

    (University of Washington and University of Munich)

Abstract

Intellectual property rights (IPRs) have been identified as key drivers of economic performance in R&D based growth models, but their impact on development has not been fully explored in development accounting exercises. We introduce IPRs to the development accounting literature, using Two-Stage Least Squares Bayesian Model Averaging (2SBMA) to address endogeneity and model uncertainty at the instrument and income stages. We show that IPRs exert similar effects as �Rule of Law,� which has long been heralded as a core development determinant in cross country regressions. Our results thus provide robust evidence that both dimensions of property rights, physical and intellectual, are crucial prerequisites to economic development. Most importantly, we document that IPRs those that are simply written into law, but are unenforced, exert no effect on development. Instead, it is the level of enforced IPRs that causes development.

Suggested Citation

  • Theo S Eicher & Monique Newiak, 2011. "Intellectual Property Rights as Development Determinants," Working Papers UWEC-2011-13-P, University of Washington, Department of Economics.
  • Handle: RePEc:udb:wpaper:uwec-2011-13-p
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    File URL: http://faculty.washington.edu/te/papers/E_N_IPR_9-19-2011.pdf
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    References listed on IDEAS

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    Cited by:

    1. repec:spr:jknowl:v:9:y:2018:i:2:d:10.1007_s13132-015-0347-3 is not listed on IDEAS
    2. Bharat Diwakar & Gilad Sorek & Michael Stern, 2017. "Patents and Growth in OLG Economy with Physical Capital," Auburn Economics Working Paper Series auwp2017-06, Department of Economics, Auburn University.
    3. Bharat Diwakar & Gilad Sorek, 2015. "Economic Development and Stage-Dependent IPR," Auburn Economics Working Paper Series auwp2015-16, Department of Economics, Auburn University.
    4. Antonio Della Malva & Enrico Santarelli, 2016. "Intellectual property rights, distance to the frontier, and R&D: evidence from microdata," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 6(1), pages 1-24, April.

    More about this item

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General

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