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Impact of strengthening Intellectual Property Rights Regime on income inequality: An econometric analysis

Saini, Swati and Mehra, Meeta K (2014): Impact of strengthening Intellectual Property Rights Regime on income inequality: An econometric analysis. Published in: Economics Bulletin , Vol. 38, No. 4 (2018): pp. 1703-1719.

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Abstract

The theory predicts that IPRs tend to raise income inequality by generating a more skewed distribution of wages. Stronger IPRs increase the demand for skilled labor force as it raises the return on R&D activities. This causes a relative increase in skilled labor wages, creating a wage bias in favor of skilled labor against unskilled labor, thus aggravating income inequality within a country. Using dynamic panel data techniques and a sample of 55 countries over 1980-2011, we examine the impact of strengthening Intellectual Property Rights (IPRs) on income distribution of a country. Our results indicate that the impact of IPRs on income distribution is contingent upon level of development of a country.Strengthening of IPRs increases income inequality in countries with higher level of development having higher ability to innovate.

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