Domestic intellectual property rights protection and the margins of bilateral exports

in: UNU-MERIT Working Papers No. 2018-035

Information

How trade related is Intellectual property right (IPRs) protection? Extant studies examining the relationship between domestic Intellectual Property Rights (IPRs) protection and trade focus predominately on imports whilst neglecting exports. This paper focuses on the latter, further examining the effect of domestic IPRs on the margins of exports. Results from the study reveal that IPRs are trade-related and that it can be a tool for stimulating exports in both developed and developing countries. We also find that the level of IPRs in the exporting country matters more to the exporter than the level of IPRs in the importing country. Examining the different export margins, we obtain robust evidence suggesting that stronger IPRs in the exporter country works largely along the extensive margin, with coefficients on the intensive margin tending to be insignificant. We discuss the welfare and growth implications of these findings in the conclusion.