The Linkage Between Intellectual Property and Innovation in the Global Innovation Ecosystem

Abstract

The protection of intellectual property rights is a mechanism of economic appropriation that seeks to reward innovative efforts. The intellectual property ecosystem structure is particular to each country, generating different investment stimuli during the innovation life cycle. Our objective is to assess the connection between intellectual property and innovation production. We estimate an unconditional panel quantile regression model using annual country data for the intellectual property (IPI) and innovation ecosystems. The pooling specification results show that the effect of intellectual property on innovation output is significant at higher quantiles. However, when controlling for time and individual fixed effects, the intellectual property ecosystem shows a positive effect at the left tail of the innovation output distribution. We also identify the predominance of non-significant effects of IPI on innovation production. The absence of a significant relationship between IPI and innovation output in more developed countries suggests that interaction between these ecosystems needs to be revised to generate better benefits.