DO STRONGER INTELLECTUAL PROPERTY RIGHTS INDUCE MORE INNOVATIONS? A CROSS-COUNTRY ANALYSIS

Abstract

This paper examines the role of IPRs protection on stimulating innovations across countries. To consider the possible difference in the relationship between IPRs and innovations for countries of various development degrees, we employ the technique of panel threshold model to proceed with empirical estimates. Based on a panel dataset of 42 countries over the 1997-2006 period, results show that stronger IPRs protections enhance innovations using conventional panel data model. After considering the threshold effects, IPRs protection remains a significantly positive influence on innovations for high-income countries, but it has no effect on fostering innovations for non-high-income countries.