Frank Jones

How is Innovation related to the Strength of Intellectual

Property Right Protections?

Model

If intellectual property rights protections are too low there will be no incentive for large scale innovation and innovation is expected to decline. At the same time, if intellectual property rights protections are too high the barriers to entry in the market will be too high for innovation to occur. The ideal level of intellectual property rights is somewhere between these two extremes where current innovators can profit while still allowing for future innovators to build upon their work.

Conceptual Model

Effects ModelStrength of IP Innovation GDP Location

Strength of IPX

InnovationX

GDPX X

LocationX X X

Equation

An expected parabolic distribution requires that the square root of Strength of Intellectual Property Rights be used for this linear regression model.

Main Variables of Interest

Y

Innovation The Global Innovation Index 2011 globalinnovationindex.org/gii/

X

Strength of Intellectual Property Right Protections International Property Rights Index 2011 Report internationalpropertyrightsindex.org

Other Variables

Non-Spurious: Primary Research SpendingEducation SpendingCollege Graduation RatesR & D Spending Rule of LawEnforcement of IP Rights IP Rights TermIndividualism v Collectivism

Spurious:

GDP (OECD)Location

Alternate Conceptual Model

Alternate Main Variables of Interest

Y

Innovation The Global Innovation Index 2011 globalinnovationindex.org/gii/

X

Strength of Intellectual Property Right Protections International Property Rights Index 2011 Report internationalpropertyrightsindex.org

Alternate Other Variables

Non-Spurious (?): Primary Research SpendingEducation SpendingCollege Graduation RatesR & D Spending Rule of LawEnforcement of IP Rights IP Rights TermIndividualism v Collectivism

Spurious (?):

GDP (OECD)Location

Location, Location, Location