Has the strenthening of patent rights since 1990 fueled energy efficiency and innovation?

Par Ricardo H. Cavazos Cepeda, Douglas C. Lippoldt
In the context of green growth and sustainability, there is a substantial and growing literature that considers means to promote further innovation with respect to energy. This paper considers the possible effects on energy efficiency from an earlier period of policy reform aimed at promotion of innovation, namely the wave of strengthening of patent rights that took place during the 1990s. This period covered the entry into effect of the World Trade Organisation’s Agreement on Trade-Related Aspects of Intellectual Property Rights, expanded adherence to various accords of the World Intellectual Property Organisation, and a variety of regional agreements and, in many countries, domestic reforms. For a broad sample of countries, this paper assesses empirically the relationship between change in the protection of patent rights between 1990 and 2005 and indicators for energy efficiency and related innovation. Controlling for other factors, it considers the question as to whether the strengthening of patent rights was associated with technological progress that may have influenced the energy intensity of economies around the world. The results present a mixed picture and, therefore, suggest the presence of a relatively complex relationship between the strengthening of patent protection and energy efficiency, one which may be influenced by such factors as changes in relative prices, heterogeneity related to resource requirements by different industries, and consumption patterns related to adoption of new technologies.
JEL Codes: D23, G19, O4, N7
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