Explaining Software Piracy using a New Set of Indicators
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Explaining Software Piracy using a New Set of Indicators Nora El-Bialy & Antonio Rodríguez Andrés & Ronia Hawash
Received: 3 March 2014 / Accepted: 1 October 2014 # Springer Science+Business Media New York 2014
Abstract Previous literature has used common aggregated indices as a proxy for intellectual property rights (IPR) institutional quality to assess their importance in determining piracy rates. The main contribution of this study is to empirically assess the relative importance of IPR institutional developments by differentiating between provision of laws protecting IPRs and their enforcement. These are observed through a factor analysis comprising different variables reflecting the copyright related laws, regulations, and agreements executed by 85 member countries of the WTO in addition to other economic and institutional characteristics of these countries. Using crosscountry software piracy rates as a proxy for IPR violations from 1994 to 2010, our results indicate that per capita income, individualism, literacy, internet spread, the number of IPR laws and agreements in a country, and judicial independence significantly determine the level of a nation’s software piracy rates. On the other hand, international threats by the United States Trade Representative (USTR) do not have a significant impact on the prevailing piracy situation. Keywords Intellectual property rights . Software piracy . Institutions . Enforcement . Judicial independence JEL Classification H11 . K40 . K42
N. El-Bialy (*) Institute of Law and Economics, Faculty of Law, University of Hamburg, Hamburg, Germany e-mail: [email protected] A. R. Andrés Departamento de Administración de Empresas y Economía, Facultad de Ciencias Económicas y Jurídicas, Universidad Camilo José Cela, C/ Castillo de Alarcón 49- Urb. Villafranca del Castillo, 28692 Villanueva de la Cañada, Madrid, Spain e-mail: [email protected] R. Hawash Economics Department, School of Liberal Arts, Indiana University-Purdue University in Indianapolis, 425 University Boulevard, Cavanaugh Hall, Room 516, Indianapolis, IN 46202, USA e-mail: [email protected]
J Knowl Econ
Introduction Several laws and regulations, i.e., formal institutions, have been designed to influence human behavior towards respecting intellectual property rights (henceforth, IPRs). Many individuals, especially in developing countries, tend to justify piracy and violation of IPRs by their low socioeconomic status. Accordingly, advocates in the field of property rights call for changing societies’ perception regarding the lawfulness of piracy behavior through enforcement of IPR institutions in a de facto manner by rigorously sanctioning unlawful behavior. Previous research in this area has focused on the impact of socioeconomic factors on software piracy from a macro perspective (Andrés 2006a; Banerjee et al. 2005; Bezmen and Depken 2006; Depken and Simmons 2004; Ding and Liu 2009; Goel and Nelson 2009; Holm 2003; Marshall 2007; Yang and Sonmez 2007; Peitz and Waelbroeck 2006). However, relatively littl
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