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Endogenous strength of intellectual property rights: Implications for economic development and growth

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  • Eicher, Theo
  • García-Peñalosa, Cecilia

Abstract

The key institution that determines sustained growth in R&D-based growth models is the strength of intellectual property rights, which are usually assumed to be exogenous. In this paper we endogenize the strength of the intellectual property rights and show how private incentives to protect these rights affect economic development and growth. Our model explains endogenous differences in intellectual property rights across countries as private incentives to invest in property rights generate multiple equilibria. We show that the resulting institutional threshold offers an explanation for why the effect of a transfer of institutions from one country to another depends on the quality of the institutions that were imported.

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Bibliographic Info

Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 52 (2008)
Issue (Month): 2 (February)
Pages: 237-258

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Handle: RePEc:eee:eecrev:v:52:y:2008:i:2:p:237-258

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Citations

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Cited by:
  1. Cozzi, Guido & Galli, Silvia, 2011. "Upstream innovation protection: common law evolution and the dynamics of wage inequality," MPRA Paper 31902, University Library of Munich, Germany.
  2. Vladimir D. Matveenk, 2011. "Interests of Social Groups, Direction of Technical Progress, and Barriers to Development: How Sustainable is the World Economic Growth?," DEGIT Conference Papers c016_047, DEGIT, Dynamics, Economic Growth, and International Trade.
  3. Andreas Schäfer & Maik T. Schneider, 2011. "Endogenous Enforcement of Intellectual Property, North-South Trade, and Growth," CER-ETH Economics working paper series 11/150, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  4. Grossmann, Volker & Steger, Thomas M., 2007. "Growth, Development, and Technological Change," IZA Discussion Papers 2558, Institute for the Study of Labor (IZA).
  5. Schäfer, Andreas & Schneider, Maik T., 2011. "Endogenous enforcement of intellectual property, North-South trade, and growth," Working Papers 96, University of Leipzig, Faculty of Economics and Management Science.
  6. Andreas Irmen & Johanna Kuehnel, 2011. "Property Rights, Optimal Public Enforcement, and Growth," CESifo Working Paper Series 3668, CESifo Group Munich.
  7. Schäfer, Andreas & Schneider, Maik T., 2011. "Endogenous Intellectual Property Rights and North-South Trade," Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48689, Verein für Socialpolitik / German Economic Association.
  8. Kristie Briggs, 2010. "Intellectual property rights and development: the spatial relationships," Journal of Economic Studies, Emerald Group Publishing, vol. 37(5), pages 525-543, September.
  9. Navas, Antonio, 2009. "Trade Openness, Institutional Change and Economic Growth," Working Papers in Economic Theory 2009/05, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
  10. Theo S Eicher & Monique Newiak, 2011. "Intellectual Property Rights as Development Determinants," Working Papers UWEC-2011-13-P, University of Washington, Department of Economics.
  11. Christian Lorenczik & Monique Newiak, 2010. "Imitation and Innovation Driven Development under Imperfect Intellectual Property Rights," DEGIT Conference Papers c015_056, DEGIT, Dynamics, Economic Growth, and International Trade.
  12. repec:udb:wpaper:uwec-2011-13 is not listed on IDEAS
  13. Guido Cozzi & Silvia Galli, 2012. "Sequential R&D and Blocking Patents in the Dynamics of Growth," Working Papers 2012_02, Durham University Business School.
  14. Tatsuro Iwaisako, 2012. "Welfare effects of patent protection and productive public services: why do developing countries prefer weaker patent protection?," Discussion Papers in Economics and Business 12-19, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  15. Barbosa, Natália & Faria, Ana Paula, 2011. "Innovation across Europe: How important are institutional differences?," Research Policy, Elsevier, vol. 40(9), pages 1157-1169.
  16. Andreas Schäfer & Maik T. Schneider, 2010. "Endogenous Intellectual Property Rights and North-South Trade," DEGIT Conference Papers c015_058, DEGIT, Dynamics, Economic Growth, and International Trade.

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