TURLING.ORG

Intellectual property protection is important to emerging economies because it helps in the creation of new knowledge, broad sharing of knowledge, and promotes economic growth. Economic growth is through increased foreign direct investments, transfers of innovations, creation of new enterprises, and lowering transaction costs in trade. However, intellectual property protection also has negative impacts on emerging economies. It increases the market power of the rights owners, which impacts competition and pricing of products. It also leads to labor displacements in the short-term as people in newly protected sectors become temporarily unemployed. It could also deter foreign direct investment because foreign firms may prefer licensing instead of direct investment.