Do Firms Respond to Stronger Patent Protection by Doing More R&D?

Joel Blit and Mauricio Zelaya
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Mauricio Zelaya: Department of Economics, University of Waterloo

No 1501, Working Papers from University of Waterloo, Department of Economics

Abstract: We examine whether stronger intellectual property rights (IPR) promote firm R&D, using changes in the IPR of export-partner countries as an exogenous source of variation. Constructing an export-weighted index of trade partner IPR by country-industry-year, we find that R&D responds strongly to trade partner IPR, and this after including industry, year, country, and interacted fixed effects. We further find evidence of this relationship at the level of the establishment, using a unique Canadian dataset. Our results suggest a causal link between IPR and firm R&D investments.

JEL-codes: O34 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2015-08, Revised 2015-08
New Economics Papers: this item is included in nep-com, nep-ino, nep-ipr, nep-pr~, nep-law, nep-sbm and nep-tid
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