Appropriate intellectual property protection and economic growth in countries at different levels of development

By Y. Kim, Keun Lee, W. Park, K. Choo. 2012

362 citations recorded by the source corpus.

This paper examines how the role of patents and utility models in innovation and economic growth varies by level of economic development. Using a panel dataset of over 70 countries, we find that patent protection is an important determinant of innovation and that patentable innovations contribute to economic growth in developed countries, but not in developing. Instead, in developing economies, a minor form of intellectual property rights (IPRs) – namely utility models – is conducive to innovation and growth, controlling for other factors. Using Korean firm level data as a case study, we find that utility model innovations contribute to firm performance when firms are technologically lagging and that those minor innovations can be a learning device and thus a stepping stone for developing more patentable inventions later on. Upon reaching higher levels of technological capabilities, firms become more reliant upon patents and less on utility models. Thus the lesson here is that patent protection enhances innovation and economic growth in countries where the capacity to conduct innovative research exists. Where this capacity is weaker, a system that provides incentives to conduct minor, incremental inventions is more conducive to growth. The significance of this paper is to emphasize the importance not just of the strength of IPRs but of the appropriate type of IPRs for economic development.

Subfields: Economics and Econometrics, Management of Technology and Innovation

View Paper: https://www.semanticscholar.org/paper/8da9b5b404954f4d22a0c0442ebd186cfcedf5b6

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

In Management of Technology and Innovation

Citations in the corpus

Patent Rights and Economic Growth: Evidence from Cross-Country Panels of Manufacturing Industries (2013, neutral): “In panels of up to 72 countries over the period 1975–2003, a higher GP index was associated with higher R&D intensity among high-income countries but not significantly related to economic growth (Kim et al ., 2008).”
An institution-based view of global IPR history (2017, background): “However, by examining the social welfare implications of protecting IPR, Kim et al. (2012) and Naghavi (2007) argue that prior to the crossover point, following the highest standards in IPR protection is not necessarily optimal.”
Knowledge Economy Gaps, Policy Syndromes, and Catch-Up Strategies: Fresh South Korean Lessons to Africa (2015, neutral): “(2012) who have concluded that the protection of patent is instrumental in innovation, with patentable innovation contributing to economic prosperity in developed, but not in developing countries (Kim et al. 2012).”
Tourism and Economic Growth (2016, methodology): “WDI is widely used in the modern economic growth literature for its high quality and international comparability (see, e.g., Kim et al. 2012.)”