The strengthening of patent enforcement appears regularly in international trade negotiations, but the views are often supported by limited, if any, empirical evidence.

The opinions of international policymakers and businesses on patent enforcement have been divided. Developed countries perceive that stronger enforcement will be beneficial to economic growth, whereas policymakers in developing countries often suggest that stronger patent enforcement will have a negative effect. 

This is the first empirical study of the strength of patent enforcement on economic growth in developed and developing countries in the post-TRIPS era. We use a newly published index that captures the strength of the enforcement-related aspects of patent systems, developed by Papageorgiadis et al. (2014).

The results reveal a highly significant, positive relationship between the level of national patent enforcement strength, and the economic growth of both developed and developing countries.

In the study, we also allow patent enforcement strength to interact with inward FDI flows (which are consistently found to have a strong positive effect on economic growth). We find that stronger levels of patent enforcement in countries that receive high levels of FDI have a significant positive effect on economic growth.

  • Stronger levels of patent enforcement have a highly significant positive effect on the economic growth of developed and developing countries.
  • There is strong evidence to support free trade negotiations and agreements that aim to increase the level of effectiveness of national patent systems, and in doing so to boost the economic growth of countries.
  • Results reveal that developing and developed countries which reformed their patent systems and achieved higher levels of patent enforcement effectiveness after TRIPS attained higher levels of economic growth.
  • The positive effects of the strength of patent enforcement identified are particularly important for developing countries that participate in international trade negotiations, but are sceptical about agreeing to adopt such policies.

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