Nominal level and actual strength of China's intellectual property protection under TRIPS agreement

Abstract

PurposeThe purpose of this paper is to improve the measurement of nominal level and actual strength of China's intellectual property protection (IPP), and examine whether the increase of actual protection strength (APS) is positive or negative impact on China's provincial economic growth.Design/methodology/approachA modified approach, based on Ginarte‐Park's (GP's) and HL's approaches, is used to measure nominal level and APS of China's intellectual property rights (IPR) from 1995 to 2007. The pooled EGLS method (cross‐section fixed effect) is used to estimate the effect of China's IPP and other variables on provincial economic growth.FindingsThe paper proves that China's APS appears an increase with a phase. China's IPP level by GP approach is on the high side, whereas China's IPP level by HL approach is slightly on the low side. Nominal level of China's IPP is largely influenced by the legislation level, whereas APS mostly embodies the effect of implementing law level. The increase of China's APS has significant positive impact on provincial economic growth. However, at the outset of building an independent innovation country, too strong IPP is bad for the development of innovation capability, and bad for provincial economic growth.Research limitations/implicationsBecause the APS is unknown, it is impossible to use APS as the dependent variable to estimate the weights of the main influencing factors. The method that the paper assumes three main factors the same weights is second best choice. Thus, several different weights are supplemented to measure the distribution values of China's APS.Practical implicationsChina's APS quantified by a modified approach and strong evidences can be used to estimate the effect on economic growth. Policy effectiveness could be maximized at seeking the endogenous benefit balance between strengthening IPP and promoting economic development.Originality/valueThe paper proposes a modified approach to measure the APS of China's IPR, and proves that the reinforcement of China's APS is beneficial to promoting provincial economic growth. However, at the outset, too strong IPP is harmful.