Economic Development and Growth

This article analyzes the effects of copyrights on economic development and international trade. First, we apply an aggregate production function to examine the effects of “copyright-related capital” (CRC) on development. This form of capital includes personal computers, servers, and bandwidth, which embody or transmit copyrighted materials. Second, we apply the gravity model of international trade to examine the effects of copyright policies on bilateral trade in core copyright industries. Third, we integrate the above frameworks to examine the two-stage effects of copyrights on development, and then on trade. We analyze these relationships using cross-sectional data for a large sample of countries. The findings show that a country’s CRC contributes positively to its economic development. The findings also show that the relative harmonization of copyright policies between countries has a positive effect on bilateral trade in core copyright industries. Finally, the findings show evidence of a two-stage process where a country’s CRC contributes positively to its economic development (stage 1), which then contributes positively to its trade (stage 2).

Citation:

Smith, Pamela J., Omar B. Da’ar, Kevin H. Monroe, Fabricio X. Nunez, and Charlotte J. Tuttle. 2009. How do copyrights affect economic development and international trade? Journal of World Intellectual Property 12 (3): 198-218.

This paper examines the effects of intellectual property rights (IPRs) on the economic growth of countries, with special attention to developing countries. We examine both the strength of countries’ IPRs, as well as their compliance with the 1995 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) of the World Trade Organization. Our theoretical framework is a growth model which distinguishes capital as physical capital, human capital and intellectual property. Our methods include panel regression techniques, plus a novel Synthetic Control method. The latter is valuable for examining policy effects in research situations where data are limited to small sample sizes; and where reverse causality and heterogeneity are concerns. The Synthetic Control method allows us to assess the impact of TRIPs compliance on economic growth relative to a counterfactual of what would have occurred in the absence of compliance. The results show that while select developing countries experience growth benefits from complying with the TRIPs agreement, others do not, supporting the notion that there is a wide range of heterogeneity in the effects of IPR reforms on growth. These findings are robust when we account for marginal institutional changes in IPRs, enforcement of IPRs, and technological capacity in developing countries.

Citation:

Smith, Pamela J. and Sebastian J. Anti. 2022. How does TRIPs compliance affect the economic growth of developing countries?: Application of the Synthetic Control method. The World Economy 45 (12): 3873-3906.