Intellectual Property Rights and South- North Formation of Global Innovation Networks

With the rise of the knowledge economy, delivering sound innovation policies requires a thoroughunderstanding of how knowledge is produced and diffused. This paper takes a step to analyze a new form of globalization, the so-called system of Global Innovation Networks (GINs), to shed light on how the protection of intellectual property rights (IPRs) influences their creation and development. The authors focus on the role of IPR protection in fostering international innovative activities in emerging economies (South), such as China and India, and more generally, how IPRs affect the development of GINs between newly industrialized countries and OECD countries. Using both survey-based firm-level and country-level global data, it was found IPRs to be an important determinant of participation in GINS from a Southern perspective. It was found that IPR protection at home and its harmonization across county pairs foster South-North formation of GINs. The authors also find that a stringent regime in the destination country discourages foreign international innovative activities that originate in NICs. http://www.recent.unimore.it/wp/recent-wp69.pdf