Intellectual Property Protection And Economic Growth

Intellectual property rights protection has been a heated issue. For each country, whether or not the implementation of intellectual property policies can promote economic growth is their primary concern. This article investigates the relation of intellectual property rights (IPR) protection and economic growth by theoretical and empirical analysis and verifies the existence of optimal strength of protection.First, in theoretical analysis, a variety-expansion model is used to investigate the impact of IPR protection on economic growth in closed economy. The point is strengthening IPR protection induces incentives to innovate. Consequently, it leads to a higher economic growth rate. However, over-protection would prolong the duration of monopoly and thus lead to a situation in which competitions are discouraged. Under this circumstance, products supplied by these monopolistic firms will be below an optimal level. Then it will cause a decline in economic growth rate. Considering all these two effects, an optimal strength of IPR protection exists. Besides, we also verify the existence of optimal strength of IPR protection from social welfare's aspect.Second, from empirical perspective, this article utilizes multinational data to confirm theoretical conclusions. Results show that IPR protection promotes economic growth. Given the development level, protection has a positive influence on economic growth for developing countries. On the contrary, for developed countries, strengthening protection inhibits growth. Subsequently, taking China's reality into account, we present a more accurate description about IPR protection in China. Then, regressions are run to verify theoretical conclusions and results show strengthening protection in China would spur economic growth.Finally, we introduce international successful experience and provide policy suggestions for China. Then we conclude this article. China should strengthen law enforcement. The strength of IPR protection should vary according to economic development level. Protection should not be the same in all industries and regions.