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Trade, imitative ability and intellectual property rights

[journal article]

Falvey, Rod; Foster, Neil; Greenaway, David

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Abstract Economic theory suggests some ambiguity concerning the effects of strengthening intellectual property rights (IPRs) on international trade. Here we extend the empirical literature that attempts to resolve this ambiguity. We use panel data to estimate a gravity equation for manufacturing exports, in aggregate and by industry, from five advanced countries to 69 developed and developing countries over the period 1970–1999. In particular, we use threshold regression techniques to determine whether the impact of IPR protection on trade depends upon the level of development, imitative ability and market size of the importing country. We confirm the importance of the importers’ imitative ability, and also find some evidence of a role for market size in this relationship. The individual industries present different patterns of thresholds and coefficients, with Total Manufacturing closely reflecting that of Fabricated Metal Products.
Classification Political Economy
Free Keywords Intellectual property rights; International trade; Gravity equation; Imitative ability; F10; F13; O34
Document language English
Publication Year 2009
Page/Pages p. 373-404
Journal Review of World Economics, 145 (2009) 3
Status Postprint; peer reviewed
Licence PEER Licence Agreement (applicable only to documents from PEER project)