Five essays on innovation and intellectual property rights in developing countries

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement) of the World Trade Organization aims at harmonizing the levels of intellectual property protection among country members, which represents a strengthening of the rights for most developing country members. However, the performance of intellectual property rights in de developing countries has been little investigated. I find that, contrary to expectations, the strengthening of intellectual property rights did not have an impact on innovative activity in the Mexican maize breeding industry. Survey of breeders’ perceptions and innovation indicators did not allow identifying an impact, except that intellectual property rights play different roles for different breeders’ groups. The evidence gathered contradicts the general expectation that strong intellectual property rights support innovation in a technologically advanced developing country. Conversely, at the macro-level I find that intellectual property rights do play an important role for innovation and that the determinants of innovation differ in industrialized and developing countries - the level of intellectual property protection is endogenous in industrialized countries but not in developing countries. I address the problem of missing data and conclude that there is a sample selection problem that needs to be controlled for. Finally, I conclude that, contrary to expectations, intellectual property protection levels do not (Granger-) cause innovation, but rather that research and development investments (Granger-) cause intellectual property protection levels. Though they seem contradictory, these two sets of empirical results reflect the importance of the level of technological development and point to the need for further research on innovation and the role of intellectual property rights at the firm and industry levels. The patenting paradox points to other roles patents could play for innovation. Though patents score modestly on their traditional functions, their „new“ roles can also be critical for the performance of innovative activity. More research is needed on these new functions, especially in the context of developing country innovation. Taking these functions into account would allow better assessing the real, overall impact of patents on innovation. These results point to the need to further investigate the relevance of domestic intellectual property protection systems for innovation. The measurement of innovation using patent applications should be evaluated accordingly, and in general more attention should be given to non-technological types of innovation, their measurement and impacts on economic development. Finally, the collection and analysis of firm- and industry-level data from developing country are critical for a better understanding of the innovation process under different conditions, and would allow better understanding the direction of the causality between intellectual property protection and innovation. In the mean time, developing countries should resist multilateral and regional attempts to strengthen intellectual property protection and rather develop systems that favour the diffusion of new information.