Influence of Patent Protection on Developing Countries’ Innovation and Technology Transfer

By Ruchi Sharma and Kaushal K. Saxena.

Published by The Global Studies Journal

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Article: Print $US10.00
Article: Electronic $US5.00

The patent policy of an economy is a significant policy tool required for the technological development of a country through stimulating domestic innovation and facilitating technology transfer. The empirical literature, however, does not support these hypotheses in their entirety. This paper proposes an alternative perspective of the channels through which developing countries gain from patent rights. According to the proposed framework, developing countries go through two stages of technological development, namely duplicative imitation (DI) and creative imitation (CI) before becoming independent innovators. These stages based on the evolution of product technology determine an economy’s innovative nature, its capabilities to absorb transferred technology, and the influence of the patent rights on primary channels of gains. The results of the empirical investigation conducted on a panel of 47 developing countries from 1980–2000 reveal the existence of two stages of technological development amongst developing economies. The results further show differences in the responsiveness of domestic innovation to patent protection of DI and CI economies. Technology transfers to DI and CI economies through foreign direct investment and foreign patenting also react differently to the patent regime.

Keywords: Patents, Economics of Innovation, Technology Transfer, Developing Countries

Global Studies Journal, Volume 4, Issue 3, pp.257-278. Article: Print (Spiral Bound). Article: Electronic (PDF File; 861.336KB).

Dr. Ruchi Sharma

Assistant Professor, School of Humanities and Social Sciences, Indian Institute of Technology Indore, Indore, Madhya Pradesh, India

Dr. Ruchi Sharma is an Assistant Professor at the Indian Institute of Technology Indore.

Prof. Kaushal K. Saxena

Professor of Economics, Department of Humanities and Social Sciences, Kanpur, Uttar Pradesh, India

Kaushal K. Saxena obtained a Master’s degree and a Ph.D. from Udaipur University and did a diploma course in Development and Planning at ISVE, Naples, Italy. Kaushal K. Saxena was awarded the Indo-USA Post Doctoral award from the University of Pennsylvania, Philadelphia, USA and visited the University for a year in 1984–85. Saxena has been teaching Economics to undergraduate and postgraduate students of Economics for the last 30 years. Presently, Saxena is Professor of Economics at IIT Kanpur. Saxena has supervised 12 Ph.D. theses and worked for few research projects. Saxena’s main areas of interests are Macroeconomics, Input-Output Economics and IPR.

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