Skip to main content
SpringerLink
Log in

What Role for Intellectual Property in Industrial Development?

  • Chapter
  • First Online:
Intellectual Property and Development: Understanding the Interfaces

Abstract

Wide differences in per capita incomes persist across and within different world regions, and economic research has argued that patterns of technology diffusion go a long way in explaining these differences. Yet, looking back at the past 40 years, it is also the case that a number of East Asian economies were able to achieve remarkable industrial development, and today host companies that compete at the world’s technology frontier. A natural question to ask is what role public policies played in spurring successful industrialization. This question seems especially pertinent in relation to technology, given the many market failures associated with knowledge acquisition and knowledge diffusion. A large number of theories have emerged and empirical investigations carried out in search for an answer. In this chapter, we scrutinize the resulting economic literature to provide a perspective on the role of intellectual property in the industrial development process. We do so in the following way. We first contrast the industrial development experience of East Asia to that of Latin America and summarize the explanations economists have offered to account for them (Sect. 2). We then turn to intellectual property and explore the evolution of both IP policies and IP use in the two regions (Sect. 3), before reviewing and critically assessing the empirical literature that has attempted to establish causality between intellectual property and industrial development (Sect. 4). Against this background, we ponder on how policymakers should approach the development of their IP framework as part of broader industrial policy objectives (Sect. 5).

Economics and Statistics Division, World Intellectual Property Organization (WIPO). The views expressed in this chapter are the authors’ own and do not necessarily reflect the views of WIPO or its Member States. We are grateful for comments from Mario Matus and Xavier Seuba.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution

Subscribe and save

Springer+ Basic
$34.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or eBook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 149.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD 199.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Similar content being viewed by others

Notes

  1. 1.

    See Roffe (1985).

  2. 2.

    See Comin and Mestieri-Ferrer (2013).

  3. 3.

    Our review of the literature is highly selective and we do not pretend to provide a full review of the literature on industrial policy and industrial development. For more comprehensive reviews, see Harrison and Rodriguez-Clare (2010) and Rodrik (2008).

  4. 4.

    To what extent NAFTA contributed to Mexico’s trade growth is far from obvious. Most of the growth occurred before NAFTA came into force at the beginning of 1994. Macroeconomic stabilization in the late 1980s likely was an important influence as well. See Lederman et al. (2004).

  5. 5.

    See Young (1994).

  6. 6.

    Young (2003) extends this analysis to China.

  7. 7.

    See Sachs and Warner (1995).

  8. 8.

    See Singer (1950) and Prebisch (1962).

  9. 9.

    See North (1990).

  10. 10.

    See Acemoglu and Robinson (2008) for a review of the literature.

  11. 11.

    See the discussion in Chap. 4 of Sinnott et al. (2010).

  12. 12.

    See Young (1994), p. 32.

  13. 13.

    See Nelson and Pack (1999).

  14. 14.

    See the opposing views put forth in World Bank (1993) and Amsden (1994).

  15. 15.

    See Rodrik (2004).

  16. 16.

    See UNCTAD (2006) and Goldstein (2002).

  17. 17.

    See Rodrik (2008).

  18. 18.

    See Freeman (1995).

  19. 19.

    Shifts in technological paradigms feature prominently in evolutionary growth theories. See Fagerberg et al. (2010) for a review of the literature.

  20. 20.

    See Park (2008).

  21. 21.

    See Roffe (2000).

  22. 22.

    The shares depicted in Fig. 4 correlate positively with the size of countries’ economies. However, they do so only imperfectly; for example, Brazil has had a larger economy than the Republic of Korea throughout the period considered in Fig. 4.

  23. 23.

    In particular, many theoretical papers on the effects of patent protection in developing countries—such as Deardorff (1990) and Helpman (1993)—implicitly assume that patents flow seamlessly across the world.

  24. 24.

    See, for example, Gambardella et al. (2008).

  25. 25.

    See the survey evidence summarized in Chap. 2 of WIPO (2011).

  26. 26.

    See WIPO (2014) for further details.

  27. 27.

    See Clerides et al. (1998) for a seminal empirical contribution on the learning effects associated with exporting.

  28. 28.

    See Lee (2012).

  29. 29.

    See Hall and Ziedonis (2001).

  30. 30.

    See Fig. 6.

  31. 31.

    See the discussion in Odagiri et al. (2012).

  32. 32.

    For further background, see, for example, Chaudhuri et al. (2006) and Duggan et al. (2016).

  33. 33.

    See Mazumdar (2013) for a comprehensive discussion.

  34. 34.

    See, for example, Branstetter et al. (2011), Chen and Puttitanun (2005), Gould and Gruben (1996), and Park and Ginarte (1997).

  35. 35.

    Branstetter et al. (2011) do not rely on aggregate IP indices but analyze how industrial production responded to historical changes in IP policies in a difference-in-difference setup. While this approach improves on panel regression approaches based on aggregate IP indices, it still faces similar measurement and endogeneity challenges.

  36. 36.

    Rodríguez and Rodrik (2001) draw the same conclusion for the relationship between trade openness and economic growth.

  37. 37.

    See Foray (2015).

  38. 38.

    See Rodrik (2008).

References

  • Acemoglu, D., & Robinson, J. (2008). The role of institutions in growth and development. Commission Growth and Development, Working Paper No. 10: The World Bank.

    Google Scholar 

  • Amsden, A. H. (1994). Why isn’t the whole world experimenting with the East Asian model to develop? Review of the East Asian miracle. World Development, 22(4), 627–633.

    Article  Google Scholar 

  • Branstetter, L., Fishman, R., Foley, C. F., & Saggi, K. (2011). Does intellectual property rights reform spur industrial development? Journal of International Economics, 83, 27–36.

    Article  Google Scholar 

  • Chaudhuri, S., Goldberg, P. K., & Gia, P. (2006). Estimating the effects of global patent protection in pharmaceuticals: A case study of quinolones in India. American Economic Review, 96(5), 1477–1514.

    Article  Google Scholar 

  • Chen, Y., & Puttitanun, T. (2005). Intellectual property rights and innovation in developing countries. Journal of Development Economics, 78, 474–493.

    Article  Google Scholar 

  • Clerides, S., Lach, S., & Tybout, J. (1998). Is learning-by-exporting important? Micro-dynamic evidence from Colombia, Mexico, and Morocco. Quarterly Journal of Economics, 113(3), 903–947.

    Article  Google Scholar 

  • Comin, D., & Mestieri-Ferrer, M. (2013). If technology has arrived everywhere, why has income diverged? National Bureau of Economic Research Working Paper No. 19010.

    Google Scholar 

  • Deardorff, A. V. (1990). Should patent protection be extended to all developing countries? World Economy, 13(4), 497–508.

    Article  Google Scholar 

  • Duggan, M., Garthwaite, C., & Goyal, A. (2016). The market impacts of pharmaceutical product patents in developing countries: Evidence from India. American Economic Review, 106(1), 99–135.

    Article  Google Scholar 

  • Fagerberg, J., Srholec, M., & Verspagen, B. (2010). Innovation and economic development. In B. H. Hall & N. Rosenberg (Eds.), Handbook of the economics of innovation (Vol. 2, pp. 833–872). Elsevier.

    Google Scholar 

  • Foray, D. (2015). Smart specialization: Opportunities and challenges for regional innovation policy. Routledge.

    Google Scholar 

  • Freeman, C. (1995). The ‘National System of Innovation’ in historical perspective. Cambridge Journal of Economics, 19(1), 5–24.

    Google Scholar 

  • Gambardella, A., Harhoff, D., & Verspagen, B. (2008). The value of European patents. European Management Review, 5(2), 69–84.

    Article  Google Scholar 

  • Goldstein, A. (2002). EMBRAER: From national champion to global player. CEPAL Review, 77, 97–115.

    Article  Google Scholar 

  • Gould, D. M., & Gruben, W. C. (1996). The role of intellectual property rights in economic growth. Journal of Development Economics, 48, 323–350.

    Article  Google Scholar 

  • Hall, B. H., & Ziedonis, R. M. (2001). The patent paradox revisited: Determinants of patenting in the U.S. semiconductor industry, 1980–94. Rand Journal of Economics, 32(1), 101–128.

    Article  Google Scholar 

  • Harrison, A., & Rodriguez-Clare, A. (2010). Trade, foreign investment, and industrial policy for developing countries. In D. Rodrik & M. Rosenzweig (Eds.), Handbook of development economics (Vol. 5, pp. 4039–4214). Elsevier.

    Google Scholar 

  • Helpman, E. (1993). Innovation, imitation, and intellectual property rights. Econometrica, 61(6), 1247–1280.

    Article  Google Scholar 

  • Lederman, D., Maloney, W. F., & Servén, L. (2004). Lessons from NAFTA for Latin America and the Caribbean. Washington, DC: The World Bank.

    Book  Google Scholar 

  • Lee, K. (2012). Intellectual property and economic development in the Republic of Korea: An introduction. In The economics of intellectual property in the Republic of Korea (pp. 10–21). Geneva: WIPO.

    Google Scholar 

  • Mazumdar, M. (2013). An overview of the Indian pharmaceutical sector. In M. Mazumdar (Ed.), Performance of pharmaceutical companies in India: A critical analysis of industrial structure, firm specific resources, and emerging strategies (pp. 17–44). Berlin: Springer.

    Chapter  Google Scholar 

  • Nelson, R., & Pack, H. (1999). The Asian miracle and modern growth theory. The Economic Journal, 109, 417–436.

    Article  Google Scholar 

  • North, D. (1990). Institutions, institutional change, and economic performance. New York: Cambridge University Press.

    Book  Google Scholar 

  • Odagiri, H., Goto, A., Sunami, A., & Nelson, R. R. (Eds.). (2012). Intellectual property rights, development, and catch-up: An international comparative study. Oxford: Oxford University Press.

    Google Scholar 

  • Park, W. G. (2008). International patent protection: 1960–2005. Research Policy, 37, 761–766.

    Article  Google Scholar 

  • Park, W. G., & Ginarte, J. C. (1997). Intellectual property rights and economic growth. Contemporary Economic Policy, 15, 51–61.

    Article  Google Scholar 

  • Prebisch, R. (1962). The economic development of Latin America and its principal problems. Economic Bulletin for Latin America, 7(1), 1–22.

    Google Scholar 

  • Rodríguez, F., & Rodrik, D. (2001). Trade policy and economic growth: A skeptic’s guide to the cross-national evidence. NBER Macroeconomics Annual, 15, 261–338.

    Article  Google Scholar 

  • Rodrik, D. (2004). Industrial policy for the twenty-first century. CEPR Discussion Paper No. 4767.

    Google Scholar 

  • Rodrik, D. (2008). Normalizing industrial policy. Commission Growth and Development, Working Paper No. 3: The World Bank.

    Google Scholar 

  • Roffe, P. (1985). Transfer of technology: UNCTAD’s Draft International Code of Conduct. The International Lawyer, 19(2), 689–707.

    Google Scholar 

  • Roffe, P. (2000). The political economy of intellectual property eights—A historical perspective. In J. Faundez, M. E. Footer, & J. J. Norton (Eds.), Governance, development and globalization. London: Blackstone Press.

    Google Scholar 

  • Sachs, J. D., & Warner, A. M. (1995). Natural resource abundance and economic growth. National Bureau of Economic Research Working Paper No 5398.

    Google Scholar 

  • Singer, H. W. (1950). The distribution of gains between investing and borrowing countries. American Economic Review, 40(2), 473–485.

    Google Scholar 

  • Sinnott, E., Nash, J., & de la Torre, A. (2010). Natural resources in Latin America and the Caribbean: Beyond booms and busts. Washington, DC: The World Bank.

    Book  Google Scholar 

  • UNCTAD. (2006). A case study of the salmon industry in Chile. New York and Geneva: United Nations.

    Google Scholar 

  • WIPO. (2011). World Intellectual Property Report 2011: The changing face of innovation. Geneva.

    Google Scholar 

  • WIPO. (2014). Study on the impact of intellectual property on the pharmaceutical industry of Uruguay. Document prepared for the Committee on Development and Intellectual Property. CDIP/13/INF/5.

    Google Scholar 

  • World Bank. (1993). The East Asian miracle: Economic growth and public policy. Washington, DC: The World Bank.

    Google Scholar 

  • Young, A. (1994). The tyranny of numbers: Confronting the statistical realities of the East Asian growth experience. National Bureau of Economic Research Working Paper No. 4680.

    Google Scholar 

  • Young, A. (2003). Gold into base metals: Productivity growth in the People’s Republic of China during the reform period. Journal of Political Economy, 11(6), 1220–1261.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. World Intellectual Property Organization, Geneva, Switzerland

    Carsten Fink & Julio Raffo

Authors
  1. Carsten Fink
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Julio Raffo
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Julio Raffo .

Editor information

Editors and Affiliations

  1. Centre for Interdisciplinary Studies on Industrial Property and Economics Law (CEIDIE), University of Buenos Aires, Buenos Aires, Argentina

    Carlos Correa

  2. Centre for International Intellectual Property Studies (CEIPI), Université de Strasbourg, Strasbourg, France

    Xavier Seuba

Rights and permissions

Reprints and permissions

Copyright information

© 2019 Springer Nature Singapore Pte Ltd.

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Fink, C., Raffo, J. (2019). What Role for Intellectual Property in Industrial Development?. In: Correa, C., Seuba, X. (eds) Intellectual Property and Development: Understanding the Interfaces. Springer, Singapore. https://doi.org/10.1007/978-981-13-2856-5_7

Download citation

  • DOI: https://doi.org/10.1007/978-981-13-2856-5_7

  • Published:

  • Publisher Name: Springer, Singapore

  • Print ISBN: 978-981-13-2855-8

  • Online ISBN: 978-981-13-2856-5

  • eBook Packages: Law and CriminologyLaw and Criminology (R0)

Publish with us

Policies and ethics

Search

Navigation