The Effect of Intellectual Property Rights Protection on the International Competitiveness of the Pharmaceutical Manufacturing Industry in China

Research on the relationship between intellectual property rights (IPR) protection and economic growth and innovation has often been explored. However, there is an absence of research dealing with the relationship between IPR protection and the international competitiveness of high-tech industries, especially the pharmaceutical manufacturing industry. This study aims to examine the impact of the strength of IPR protection on the international competitiveness of China's pharmaceutical manufacturing industry, by using time series data from 1995 to 2014. A modified Ginarte-Park (GP) index is used to measure the strength of IPR protection, while the revealed comparative advantage (RCA) index is used to measure the international competitiveness of China's pharmaceutical manufacturing industry. A multivariate time series model and ordinary least squares (OLS) estimation are employed to examine the relationship between IPR protection and the RCA index. The results show that strict IPR protection does not enhance the international competitiveness of China's pharmaceutical manufacturing industry. The finding suggests that it is more appropriate to adopt a more relaxed IPR protection system for the pharmaceutical manufacturing industry in China. The finding may also provide a reference for countries which have similar backgrounds.