Imitation and innovation driven development under imperfect intellectual property rights
AbstractDeveloping countries employ about two-fifth of the world's researchers, originate one quarter of world expenditures on R&D, and their inventions are subject to imitation. Nevertheless, the previous literature focuses on North–South setups in which the South is restricted to imitating northern inventions. To analyze the effects of IPR policies on developed and developing countries, we extend this literature to allow not only for southern innovation and imitation of northern goods, but also for imitation targeted at southern innovations. We find the effects of IPRs on R&D and welfare to be non-monotonic and dependent on innovation efficiency and an innovation threshold in the South. For sufficiently strong IPRs the South engages in original R&D and stronger IPRs promote southern innovation, welfare, and a reduction in the North–South wage gap. Below the threshold, a strengthening of IPR protection fails to promote innovation and decreases welfare. Stronger IPRs exclusively for southern firms can benefit both regions by shifting southern resources from the imitation of northern goods to original southern innovation.
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Bibliographic InfoArticle provided by Elsevier in its journal European Economic Review.
Volume (Year): 56 (2012)
Issue (Month): 7 ()
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Innovation; Imitation; Economic growth; Intellectual property rights;
Other versions of this item:
- 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.
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
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