Economics Program Presents
Do Patent Rights Matter? 40 Years of Innovation, Complexity and Productivity
Wednesday, November 28, 2018
Olin Humanities, Room 102
5:30 pm – 6:30 pm EST/GMT-5
5:30 pm – 6:30 pm EST/GMT-5
Cassandra Sweet and Dalibor Eterovic
Does the rigorous protection of patent rights advance or retard economic development? Two decades ago, a new global standard of intellectual property swept across developing and industrialized nations through the implementation of the WTO’s TRIPS Agreement. Many years later, the issue of patents remains contentious. In this talk, we focus on the effects of patent rights systems on total factor productivity growth, using dynamic panel regression analysis for 70 countries from 1965 to 2009. We show that the effects of stronger or more rigorous patent systems are insignificant for productivity growth in both developing and industrialized countries. Why does the strength of patents appear to have no impact on productivity? Classic economic theory suggests that stronger patent systems incentivize innovative output, with important spillover effects for productivity and growth. We offer an alternative explanation using data from the Economic Complexity Index. We find that while patents are increasingly irrelevant to productivity, the relationship between economic complexity and productivity is highly positive and significant. Our results are consistent with the contributions of the absorptive capacity theory in that they suggest it is not the discovery and ownership of novel products and processes at the innovative frontier that induces productive growth, but the ability of countries to adapt, replicate, and diffuse along the international productive chain.For more information, call 845-758-6141, or e-mail [email protected].
Time: 5:30 pm – 6:30 pm EST/GMT-5
Location: Olin Humanities, Room 102