Intellectual Property for Economic Development

Intellectual Property for Economic Development

KDI series in Economic Policy and Development

Edited by Sanghoon Ahn, Bronwyn H. Hall and Keun Lee

Protection of intellectual property rights (IPRs) serves a dual role in economic development. While it promotes innovation by providing legal protection of inventions, it may retard catch-up and learning by restricting the diffusion of innovations. Does stronger IPR protection in a developing country encourage technology development in or technology transfer to that country? This book aims to address the issue, covering diverse forms of IPRs, diverse actors in innovation, and diverse cases from Asia and Latin America.

Chapter 4: Patents versus utility models in a dynamic change of an economy: Korea

Keun Lee and Yee Kyoung Kim

Subjects: economics and finance, development economics, intellectual property, law and economics, innovation and technology, intellectual property


While the rapid economic growth of Korea has often been associated with the role of the government, another stream of research has focused on the role of upgrading technological capability in the course of economic development (Lee 2013; Kim 1997). After the 1980s, Korea became one of the world’s leading patenting nations. The U.S. patents owned by Koreans rose from 14 in 1982 to 3,562 in 1999, and the share of Koreans in U.S. patents rose from 0.01% to 2.32% over the same period (United States Patent and Trademark office (USPTO), 2009). In 1999, Korea ranked seventh in terms of patents granted in the U.S. behind the U.S., Japan, Germany, France, Taiwan, and the U.K. What drove such a rapid upgrade or development of technological capability in Korea? This chapter aims to address this issue by investigating the role of industrial property rights. While the World Intellectual Property Organization (WIPO) report by Lee at al. (2003) pursued a similar issue through a survey and qualitative analysis using descriptive data, this chapter will conduct an econometric analysis using both time series and firm-level data, applying a method similar to that of Kim et al. (2012). This chapter analyzes the role of intellectual property rights (IPRs) from two different perspectives. First, we take a dynamic perspective to analyze the changing role of the IPRs over the course of economic growth (Lee and Kim 2010).

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