International Protection of Intellectual Property: an Empirical Investigation∗

This paper is an empirical study on the estimation of Grossman and Lai’s (2004) gametheoretic model of international patent protection. The model yields clear predictions of the variation in degrees of patent protection across countries based on the market sizes and levels of innovative capability of the countries, and interdependence of the degrees of patent protection between countries. To estimate the interactions between countries, we adopt the spatial econometrics approach. We find that the pattern of patent protection around the globe was broadly consistent with the predictions of the non-cooperative game model before the implementation of the TRIPS agreement in 1995.