Intellectual Property Use in Middle Income Countries: The Case of Chile

Abstract

A frequently debated question is whether the use of intellectual property (IP) protection benefits the residents of low and middle income countries. We contribute to this debate with an analysis of the use of patents and trademarks by firms in Chile over the decade 1995-2005 as the then middle-income country experienced rapid economic growth. Using a novel dataset containing the merge of detailed firm-level information from the annual manufacturing census with firms’ patent and trademark filings with the Chilean IP office, we look at how IP use by companies has changed over time and analyze the determinants of and outcomes from their use, in particular first-time use. We find that firm growth prompts first-time use of patents and trademarks, though such use does not change the growth trajectory of firms nor does it improve their total factor productivity.