Precursors of intellectual property rights enforcement in East and Southeast Asia

In this study we identify the main determinants of perceived strength of intellectual property rights in four developed (Japan, Singapore, South Korea, and Taiwan) and five emerging (China, Indonesia, Malaysia, the Philippines, and Thailand) Asian countries over the period 2003-2016. We use a panel model with additive unobserved individual-specific heterogeneity in a high-dimensional setting. The setting allows the number of time-varying regressors to exceed the sample size. Based on the Cluster-Lasso approach, we found that (1) bribery and corruption (inverse), equal opportunity, administration of justice, knowledge transfer, personal security and private property rights, and qualified engineers are significant determinants of intellectual property rights for developed countries; (2) adaptability of government policy, bribery and corruption (inverse), bureaucracy (inverse), and science in schools are significant determinants of intellectual property rights for emerging countries. Policy makers may use these results to strengthen IP rights and thus encourage indigenous innovation as well as foreign direct investment.