Revisiting the Impact of TRIPS on IPR-intensive Export Flows: Evidence from Staggered Difference-in-Differences

Ridwan Ah Sheikh and Sunil Kanwar
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Ridwan Ah Sheikh: Department of Economics, Delhi School of Economics

No 351, Working papers from Centre for Development Economics, Delhi School of Economics

Abstract: This paper evaluates the impact of the agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) on IPR-intensive export flows. The compliance requirements or the transition period clause that countries enjoyed under the agreement means that TRIPS implementation is staggered. We employ a recent heterogeneity robust difference-in-differences research design based on the rollout of the agreement in 155 countries from 1990-2010. Utilizing various partial aggregation schemes, we summarize the treatment effect heterogeneity across different dimensions. The robustness of baseline model is tested by looking at the impact of agreement in specific industrial clusters, demonstrating increased sensitivity to intellectual property. Our summary parameters aggregated by cohort-time, event-time and calendar-time reveal: First, the aggregate treatment effect estimates suggest that TRIPS on average led to significant reduction in IPR-intensive export flows. Second, our results demonstrate significant heterogeneity both across treatment cohorts as well as across different time periods. In particular, TRIPS led to almost 36% increase in IPR-intensive export flows in early complied cohorts, while the agreement cause 38% decline in exports for the treatment cohorts that complied later. Third, the IPR-intensive exports exhibit U-shaped response to TRIPS, falling for about ten years and then rising again. Moreover, the significant positive impact of agreement based on event-study estimates kicks in with delay. Specifically, eleven years after the agreement’s initiation, export flows are 41% higher in compliant cohorts relative to the comparison group and these effects persist until 14 years after the agreement’s inception. Fourth, the conclusions based on aggregate trade flows remain valid when examining the impact of TRIPS on the composition of trade within disaggregated industry clusters. JEL Code: C21, C23, F13, F14, O34

Keywords: TRIPS; Exports; Intellectual property rights; Difference-in-differences; Treatment effects; Event study (search for similar items in EconPapers)
Pages: 46 pages
Date: 2024-07
New Economics Papers: this item is included in nep-int and nep-ipr
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