Intellectual Property Protection and the Geography of Trade

This paper investigates how the implementation of intellectual property rights in developing countries under the 1995 TRIPS agreement affected trade in knowledge-intensive goods. We compare trade in knowledge-intensive goods with trade in other types of goods for 158 members and observers of the World Trade Organization from 1993—2009. Trade in knowledge-intensive goods increased relative to a control group after TRIPS implementation. The increase in imports by developing countries was driven by exchange with high-income countries and was concentrated in the information and communications technology sector. Our findings suggest that the effect of TRIPS on promoting knowledge diffusion from high-income to developing countries varies by sector.