Tag Archives: SAU Development Economcis

Feb 17 2014

INNOVATION, EFFICIENCY, PRODUCTIVITY AND INTELLECTUAL PROPERTY RIGHTS: EVIDENCE FROM A BRICS ECONOMY

Seminar of Faculty of Economics, South Asian University

Speaker: Professor Sunil Kanwar. Ph.D. (University of California at Berkeley)
Field(s): Development Economics, Intellectual Property, Labour Economics, Agricultural Economics

Venue: FSI Hall, South Asian University

Date:  January 31, 2013; 2.30pm

Santosh C Panda, Dean & Professor of Faculty of Economics, and the coordinator of the seminar gave a warm welcome to the students and welcome. Professor Sunil Kanwar Ph.D. (University of California at Berkeley) Prof. thanked dean who was his colleague at DSE and started his speech by introducing intellectual property rights in context of BRICS economy.

BRICS is the acronym for an association of five major emerging national economies: Brazil, Russia, India, China and South Africa. Now known as fragile five. He listed the reasons behind their growth and stated his central question “Has spectacular performance of BRICS been accompanied by greater innovation, efficiency and productivity, associated with the strengthening of IPRs post-TRIPs”

Three major IP reforms in India are Patents (Amendment) Acts of 1999, 2003, and 2005.He argued that much literature predicts greater inflow of technology and superior inputs in response to stronger IPRs. Positive association appears consistent with the theory given by many economists. He suggested that Stronger IPRs may spur due to

* Domestic innovation (Kanwar-Evenson 2003, Chen- Puttitanum 2005)

* Technology licensing (Yang-Maskus 2001, Park-Lippoldt 2005, Branstetter et.al 2006, Kanwar 2012a)

* Exports/high-tech exports from north to south (Ferrantino 1993, Smith 2001, Ivus 2010)

* FDI (Ferrantino 1993, Lee-Mansfield 1996, Javorcik 2004

* Overseas R&D (Branstetter et al 2006)

Contrary evidence were also found by many like Sakakibara-Branstetter 2001, Lerner 2002, Qian 2007,Ferrantino 1993, Fosfuri 2002,Kanwar 2012b.

He contributed by focusing directly on the relationship between IPRs post-TRIPs and the levels of the technical frontier(TF), production efficiency(PE), and total factor productivity (TFP) in the manufacturing sector. He defined  innovation in terms of shifts in the technical frontier (TF) where frontier is approximated as the maximum possible total factor productivity. Production efficiency is the difference between a firm’s actual TFP and the technical frontier, such that

TFPit = (TFt) (PEit)

Where TFP is measured using the Fare-primont productivity index

By collecting Firm-level data for the Indian manufacturing sector for 15084 sample observations – 838 firms for the period 1994-2011, covering 17 industries (2-digit level), Computing TF, PE and TFP based on data on sales, raw materials, net fixed assets, and salaries; each deflated by industry-specific WPIs and running various regressions.he concluded that there is consistent evidence that IP reforms post-2003 stimulated innovation, and total factor productivity in Indian manufacturing industries as due to IP, TF increases by 0.4%, PE by 0.9% and TFP by 1.3%. The results appear to be both statistically as well as economically significant.

Rapporteur:  Sakshi jindal, 2nd Semester student, MA in Development Economics