Impact of Intellectual Property Rights on International Trade: Evidence from India

This paper analyzed the effect of intellectual property rights (IPR) on Indian trade by employing Johansen’s Co-integration test, VECM and Granger Causality approach. Annual time series data on variables viz. trade, patents, copyrights, trademark for Indian economy, stemming from 1996-97 to 2013-14 have been used in analysis. The empirical result shows that there exists significant long run relationship between Indian trade and export as well as import of patent related commodities It also suggests that all the series are found to be co-integrated of order one. It means export as well as import of patent related commodities are significantly contributing towards Indian trade. The short run Vector Error Correction Model (VECM) reveals that Indian Trade (LNTRADE) respond significantly to re-establish the equilibrium relationship whenever there is any disturbance in the system in long run. Further Granger causality test exhibits that there exists unidirectional causality running from Indian trade to export and import of patent related commodities, export of trademark related commodities whereas causality runs from export and import of copyright related commodities to Indian trade.