Are intellectual property infringements affecting the economy?

Directly or indirectly, previous studies teach us that intellectual property (IP) rights do influence the economy in some kind of way. In this study, the effect of infringements of these rights is studied. By a short literature survey and a data research using OLS regression and fixed effects models, the following effects are studied: first, the effect of the strictness of a country’s IP rights system on the number of infringement cases in that country; second, the effect of the number of pending infringement cases in a country on that country’s GDP; third, the effect of the strictness of the IP rights system on the GDP in a country. This study is performed on all current member states of the European Union, over the time period 2003-2017. The strictness of the IP rights system in a country results in a lower number of pending infringement cases in that country. Firms do not want to take the risk of being sanctioned if it outweighs the advantages of copying protected knowledge. The number of pending infringement cases does not affect the economic growth in a country, whereas the strictness of the IP rights system seems to be of positive influence. However, this effect only exists when there is not being controlled for country-specific characteristics.