Abstract

Implementation of TRIPs agreement by developing countries strengthens their patent protection. In this paper we explore an alternate channel of gain for developing countries from strong patent regime. We propose that South’s market size and patent rights affect innovative activity in North. We empirically verify these hypotheses by employing panel data of 46 developing countries for time period 1980-2000. Results show that developing countries can divert research resources concentrated in North to their requirements with strong patent rights. These countries, however, require being more open to international trade and technologically active to enjoy these gains.