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The effect of Intellectual Property Rights on domestic innovation in the pharmaceutical sector

Simona Gamba

No 2016-05, FBK-IRVAPP Working Papers from Research Institute for the Evaluation of Public Policies (IRVAPP), Bruno Kessler Foundation

Abstract: This paper analyses the causal effect of Intellectual Property Rights (IPR) protecting pharmaceutical products and processes on pharmaceutical domestic innovation in a panel of 74 countries. The identification strategy exploits the different timing across these countries of two homogeneous sets of IPR reforms. Domestic innovation is measured as citation-weighted domestic patent applications filed at the European Patent Office (EPO): the highly skewed distribution of the dependent variable, and the high number of zero observations, are taken into account by using count data models. In particular, a Zero Inflated Negative Binomial model is adopted to take into consideration the choice not to patent at the EPO. Results show that patent protection stimulates innovation, although the effect is not long-lasting. Developing countries profit significantly less than developed ones from the protection, benefiting from an effect that is roughly one half the one for developed countries.

Keywords: Intellectual Property Rights; Pharmaceutical sector; Innovation; Patents; TRIPS; Developing countries (search for similar items in EconPapers)
JEL-codes: I18 K10 O1 O31 O34 (search for similar items in EconPapers)
Date: 2016-03
New Economics Papers: this item is included in nep-ino, nep-ipr, nep-pr~, nep-knm and nep-tid
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Related works:
Journal Article: The Effect of Intellectual Property Rights on Domestic Innovation in the Pharmaceutical Sector (2017) Downloads
Working Paper: The Effect of Intellectual Property Rights on Domestic Innovation in the Pharmaceutical Sector (2016) Downloads
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