| Abstract: |
This paper evaluates the impact of the agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS) on IPR-intensive export flows. The
compliance requirements or the transition period clause that countries enjoyed
under the agreement means that TRIPS implementation is staggered. We employ a
recent heterogeneity robust difference-in-differences research design based on
the rollout of the agreement in 155 countries from 1990-2010. Utilizing
various partial aggregation schemes, we summarize the treatment effect
heterogeneity across different dimensions. The robustness of baseline model is
tested by looking at the impact of agreement in specific industrial clusters,
demonstrating increased sensitivity to intellectual property. Our summary
parameters aggregated by cohort-time, event-time and calendar-time reveal:
First, the aggregate treatment effect estimates suggest that TRIPS on average
led to significant reduction in IPR-intensive export flows. Second, our
results demonstrate significant heterogeneity both across treatment cohorts as
well as across different time periods. In particular, TRIPS led to almost 36%
increase in IPR-intensive export flows in early complied cohorts, while the
agreement cause 38% decline in exports for the treatment cohorts that complied
later. Third, the IPR-intensive exports exhibit U-shaped response to TRIPS,
falling for about ten years and then rising again. Moreover, the significant
positive impact of agreement based on event-study estimates kicks in with
delay. Specifically, eleven years after the agreement’s initiation, export
flows are 41% higher in compliant cohorts relative to the comparison group and
these effects persist until 14 years after the agreement’s inception. Fourth,
the conclusions based on aggregate trade flows remain valid when examining the
impact of TRIPS on the composition of trade within disaggregated industry
clusters. JEL Code: C21, C23, F13, F14, O34 |