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The Effect of Intellectual Property Rights on Domestic Innovation in the Pharmaceutical Sector

Simona Gamba

Published 2017 in Social Science Research Network

ABSTRACT

This paper analyses the causal impact of Intellectual Property Rights (IPR) on pharmaceutical innovation in a panel of 74 countries. The identification strategy exploits the different timing across countries of two sets of IPR reforms. Domestic innovation is measured as citation-weighted domestic patents filed at the European Patent Office (EPO): to account for their distribution, count data models are used. A Zero Inated Negative Binomial model is adopted to consider the choice not to patent at the EPO. Results show that, in the short-run, IPR stimulate innovation. The effect for developing countries is roughly half of that for developed countries.

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