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

Author

Listed:
  • Joel Blit

    (Department of Economics, University of Waterloo)

  • Mauricio Zelaya

    (Department of Economics, University of Waterloo)

Abstract

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.

Suggested Citation

  • Joel Blit & Mauricio Zelaya, 2015. "Do Firms Respond to Stronger Patent Protection by Doing More R&D?," Working Papers 1501, University of Waterloo, Department of Economics, revised Aug 2015.
  • Handle: RePEc:wat:wpaper:1501
    as

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    References listed on IDEAS

    as
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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

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