Intellectual Property Protection and the Brain Drain

Due to the poor availability of data on migration and intellectual property rights (IPRs) protection, the relationship between IPRs and brain drain remains a blind spot in economic literature. Intellectual property is a term that refers to the creation of novel ideas. As skills are a fundamental component in producing ideas, brain drain can have a direct impact on the creation of intellectual property. But can an adequate protection of IPRs reverse the phenomenon of brain drain? A look at few existing works and the road ahead gives the impression that IPRs indeed govern the location and the magnitude of innovation activities. Better technologies, if not better institutions, can be transferred back to the migrants’ country of origin through trade, FDI, return migration, and diaspora knowledge networks. If a better IPR environment in developing countries encourages the use of knowledge acquired abroad, a brain gain can mitigate the loss from the initial outflow of brains. Naghavi and Strozzi (2015) take the first initiative to provide an empirical assessment of the two effects and investigate the role of IPRs in determining the magnitude of the two effects. They argue that improving IPR institutions in sending countries can be a policy to exploit the fruits of diasporas.