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Comments Welcome Intellectual Property Rights as Development Determinants1

Summary: Comments Welcome
Intellectual Property Rights as Development Determinants1
Theo S. Eicher
University of Washington
Monique Newiak
LMU Munich and University of Washington
Version 1.0
Intellectual property rights (IPRs) have been identified as key drivers of economic
performance in R&D based growth models, but their impact on development has not been
fully explored in development accounting exercises. We introduce IPRs to the
development accounting literature, using Two-Stage Least Squares Bayesian Model
Averaging (2SBMA) to address endogeneity and model uncertainty at the instrument and
income stages. We show that IPRs exert similar effects as "Rule of Law," which has long
been heralded as a core development determinant in cross country regressions. Our
results thus provide robust evidence that both dimensions of property rights, physical and
intellectual, are crucial prerequisites to economic development. Most importantly, we
document that IPRs which are simply written into law, but are unenforced, exert no effect
on development. Instead, it is the level of enforced IPRs that causes development.


Source: Anderson, Richard - Department of Computer Science and Engineering, University of Washington at Seattle


Collections: Computer Technologies and Information Sciences