Influence of intellectual property rights protection on dual margins of China's export growth

YU Changlin1,2

(1.Center for Macroeconomic Research at Xiamen University)
(2.School of Economics at Xiamen University)

【Abstract】This paper analyzes the impact mechanism of intellectual property rights (IPR) protection on margins of export by introducing IPR protection into heterogeneous firm trade model. Then, it constructs an extended trade gravity model incorporating IPR protection variables. By applying OLS and instrumental variable estimation method, this paper investigates the effect of IPR protection in the export market on the dual margins of China’s export growth based on China’s manufacturing products export data of 95 export markets during 2002 to 2013. The results show the effect of IPR protection on the extensive margin is significantly positive and that on the intensive margin is significantly negative, indicating that IPR protection promotes China’s export growth through the extensive margin. Economic scale, geographical distance, fixed trade cost and multilateral resistance work along the extensive margin to impact China’s export growth. The above results are robust for estimations on technology intensive industry, different decomposition approaches of export margins and different measurement indicators under IPR protection.

【Keywords】 intellectual property rights protection; intensive margin; extensive margin; trade cost;

【DOI】

【Funds】 Supported by Youth Program of National Social Science Foundation of China (11CJY073); Major Program of National Social Science Foundation of China(13&ZD029); Key Program of Major Subjects on Philosophy and Social Sciences of Ministry of Education (14JZD011); the Fundamental Research Funds for the Central Universities (20720151037); Center for Macroeconomic Research of Xiamen University—Key Research Base for Liberal Arts of Ministry of Education (13CMRZS01).

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(Translated by WANG Heng)

    Footnote

    [1]. 1 Given γ > ε - 1, it guarantees that the distribution of enterprise scale has a finite mean value (Chaney, 2008). [^Back]

    [2]. 2 If we pay little attention to the assumption that enterprise productivity refers to generalized Pareto distribution, influence of variable trade cost (such as, GDP, geographical distance and multilateral resistance) on intensive margin is uncertain. That is because there are two opposite influences of trade cost on intensive margin: on the one hand, reduced variable trade cost increases the export value of exported enterprise products, which improves average export value of unit enterprise product; on the other hand, reduced variable trade cost allows access of new export enterprise with small export scale, which reduces average export value of unit enterprise product. Such two opposite influences can be cancelled out each other in case of enterprise productivity in compliance with generalized Pareto distribution. [^Back]

    [3]. 3 Market scale in China (or GDP) shall be merged into constant term, because export country in the paper only refers to China. [^Back]

    [4]. 4 Considering limited pages of the paper, specific names of the 95 countries were omitted, and is available upon request. [^Back]

    [5]. 5 Due to the page limitation, the detailed calculation process is omitted. See Head and Mayer (2004) for details. [^Back]

    [6]. 6 Due to the page limitation, names of 12 technology-intensive industries are omitted. Interested readers are welcomed to ask the author. [^Back]

    [7]. 7 Due to the page limitation, calculation methods are left out. Interested readers are welcomed to ask the author. [^Back]

    References

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    Hummels,D, and P. Klenow., (2005)“The Variety and Quality of a Nation’s Exports,”American Economic Review 95,704-723.

    Maskus, K.E. and Yang Lei., (2013)“The Impacts of Post-TRIPS Patent Reforms on the Structure of Exports,”RIETI Discussion Paper Series 13-E-030.

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This Article

ISSN:1002-8870

CN: 11-1262/F

Vol , No. 07, Pages 130-144

July 2018

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Article Outline

Abstract

  • Introduction
  • 1. Theoretical framework
  • 2. Methodology and data
  • 3. Empirical results and analysis
  • 4. Conclusion
  • Footnote

    References