Using panel data, this paper investigates the impacts of the strengthening of intellectual property rights (IPRs) on innovative activity. The estimation results indicate the following important implications. First, IPRs alone do not play a significant role. Second, the effect of IPRs is strong and significant only when it is interacted with complementary environments for innovation. This finding suggests that IPRs play a significant role only via a specific channel of interaction such as the stage of economic development, institutional environment and trade openness. Third, the significant correlation is not identical across countries implying that some countries were positively affected while others were negatively affected. Those countries are identified as well.