Which countries protect intellectual property? The case of software piracy

Using data on software piracy, we examine how protection of intellectual property varies across countries. Consistent with other studies, we find that intellectual property receives greater protection in developed economies; high‐income countries have lower piracy rates. We also find that protection depends on cultural factors. Countries with an individualist culture have lower piracy rates than do countries with a collectivist culture. Piracy rates are also lower in countries that have strong institutions that enforce contracts and protect property from expropriation. These results suggest that national policies toward intellectual property reflect not only economic concerns but also national culture and institutions.