Intellectual Property Rights and Economic Growth: The Case of Middle Income Developing Countries

Abstract

Intellectual property (IP) refers to the creation of mind: inventions, literary and artistic works, and symbols, name, and images used in commerce. Intellectual property rights (IPRs) have been widely recognised as a growth enhancing factor for the global economies as a whole. IPRs regime can influence the growth process through domestic and external sector of an economy. This study is primarily concerned with the effects of IPRs regime through external sector. Through different channels IPRs can promote economic growth in the recipient countries. The most important is technology transfer and its positive spillovers. Therefore, IPRs exert economic growth, which requires increase in productivity, increase in productivity requires increase in technological innovation and it requires the efficient protection of IPRs Rapp and Rozek (1990). The IPRs can influence the average growth more effectively in the open economies as compare to the close one Gould and Gruben (1996). Latter on Thompson and Rushing (1999) extended the model and included total factor productivity (TFP) in their growth model, which shows that IPRs have an insignificant impact on TFP for developed and developing countries but a positive and significant impact for the developed countries. To sustain economic growth it requires secured property rights system.