LINKAGES BETWEEN INTELLECTUAL PROPERTY RIGHTS REGIME AND INCOME INEQUALITY

Swati Saini

doi:10.29121/ijetmr.v5.i3.2018.180

Abstract

This paper examines the impact of strengthening Intellectual Property Rights (IPRs) on within-country income inequality for a cross-section of 65 developed and developing countries for the time period 1995-2009.The results indicated that strengthening of IPRs led to an increase in income inequality in WTO-member developing countries after they started modifying their national IPR regimes to conform to the TRIPs requirements. IPRs tend to raise income inequality by generating a more skewed distribution of wages. Stronger IPRs increased the demand for skilled labor force as it raised the return on R&D activities. This caused a relative increase in skilled labor wages, creating a wage bias in favor of skilled labor against unskilled labor, thus aggravating income inequality within a developing country. Moreover, the effect on inequality was more pronounced for developing countries that were experiencing higher per capita GDP growth rates. As for the developed countries included in the sample, the analysis seemed to suggest that IPRs led to a decline in income inequality over the study period.

Highlights

Intellectual Property (IP) refers to products or ideas that are creations of an individual’s mind
The distances have been measured from the average Intellectual Property Rights (IPRs) and average of averaged GDPGROWTH values of 3.36 and 4.55% for developing countries
As discussed in the introductory section, against the backdrop of Trade Related Aspects of Intellectual Property Rights (TRIPs) Agreement,this study focused on the analysis of the impact of strengthening IPRs on income distribution in developing countries after they became members of World Trade Organization (WTO) in 1995, and initiated the process of complying with the requirements of the TRIPs Agreement

Summary

Introduction

Intellectual Property (IP) refers to products or ideas that are creations of an individual’s mind. The increased globalization of markets has made it possible for firms to sell their products in other countries and to choose foreign destinations for production and investment purposes This benefit has come at a cost, as globalization has made it easier for intellectual property to be accessed and copied (through imitation or reverse engineering) in countries that provide weaker IPR protection. This consideration has led to the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs), a product of the Uruguay Round (1986-1994) of trade negotiations. The TRIPs Agreement, for the first time, provides for certain minimum standards for protection and

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