The Geography and Determinants of Intellectual Property Rights

This paper studies the spatial patterns and the determinants of intellectual property rights (IPRs). I ̄nd evidence of spatial correlation in the strength of IPRs provided by di®erent countries. This spatial association persists after controlling for domestic socio-political and economic variables that can a®ect the choice of IPRs and which could potentially be correlated in space. A possible explanation for the spatial dependence is strategic interaction between trading partners in the choice of the degree of protection they provide. Two di®erent spatial metrics are used in the empirical analysis: contiguity, and distance. Contiguous countries or neighbors are those who share a common border. I ̄nd that the stronger IPRs provided by the neighbors, the weaker (stronger) IPRs provided by countries that import (generate) technology. On the other hand, the spatial association is always positive, independently of whether the country imports technology or innovates, when distance is the chosen metric. This results suggests that the nature of the spatial association changes in space for countries which import their technology. Countries with greater technological capabilities provide stronger IPRs. Contrary to the prediction of most of the models in the IPRs literature, large LDCs do not seem to provide stronger protection than small LDCs. JEL Classi ̄cation: F13, C23, C14 ¤ I want to thank Jonathan Eaton, Samuel Kortum, Stephen Donald, Kevin Lang, Dan Ackerberg, and Raimond Dezzani for their invaluable comments. Any remaining mistakes are my own. Support from the Alfred P. Sloan Foundation is acknowledged.