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Do Firms Respond to Stronger Patent Protection by Doing More R&D?

Listed author(s):
  • Joel Blit

    (Department of Economics, University of Waterloo)

  • Mauricio Zelaya

    (Department of Economics, University of Waterloo)

We examine whether stronger intellectual property rights (IPR) promote firm R&D, using changes in the IPR of export-partner countries as an exogenous source of variation. Constructing an export-weighted index of trade partner IPR by country-industry-year, we find that R&D responds strongly to trade partner IPR, and this after including industry, year, country, and interacted fixed effects. We further find evidence of this relationship at the level of the establishment, using a unique Canadian dataset. Our results suggest a causal link between IPR and firm R&D investments.

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Paper provided by University of Waterloo, Department of Economics in its series Working Papers with number 1501.

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Length: 37 pages
Date of creation: Aug 2015
Date of revision: Aug 2015
Handle: RePEc:wat:wpaper:1501
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