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Distance to frontier, intellectual property rights, and economic growth

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  • Haibin Wu
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    Abstract

    This article examines the effects of intellectual property rights (IPR) protection on growth and convergence. Firms in a country undertake both innovation and imitation to improve their productivity. IPR protection reduces the cost of innovation, but makes imitation more costly. Countries at early stages of growth adopt a strategy of high effort on imitation, and switch to the strategy of high effort on innovation at some point. A higher degree of IPR protection makes the switch to the strategy of high effort on innovation earlier. There are two possible growth traps. A middle-income trap arises when a country fails to switch to high effort on innovation due to a low degree of IPR protection. Whereas a poverty trap may exist at the early stage of development, when there is no enough effort on imitation due to a strict IPR protection.

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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Economics of Innovation and New Technology.

    Volume (Year): 19 (2010)
    Issue (Month): 2 ()
    Pages: 165-183

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    Handle: RePEc:taf:ecinnt:v:19:y:2010:i:2:p:165-183

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    Related research

    Keywords: innovation; imitation; intellectual property rights; convergence; traps;

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    Cited by:
    1. Chu, Angus C. & Cozzi, Guido & Galli, Silvia, 2011. "Innovating like China: a theory of stage-dependent intellectual property rights," MPRA Paper 30553, University Library of Munich, Germany.
    2. Azevedo, Mónica L. & Afonso, Óscar & Silva, Sandra T., 2014. "Endogenous growth and intellectual property rights: A north–south modeling proposal," Economic Modelling, Elsevier, Elsevier, vol. 38(C), pages 112-120.
    3. Mónica L. Azevedo & Óscar Afonso & Sandra T. Silva, 2013. "Endogenous growth and intellectual property rights: a North-South modelling proposal," FEP Working Papers, Universidade do Porto, Faculdade de Economia do Porto 492, Universidade do Porto, Faculdade de Economia do Porto.
    4. Chu, Angus C. & Cozzi, Guido & Galli, Silvia, 2013. "Theory and Empirics of Stage-Dependent Intellectual Property Rights," Economics Working Paper Series, University of St. Gallen, School of Economics and Political Science 1306, University of St. Gallen, School of Economics and Political Science.
    5. Chu, Angus C. & Cozzi, Guido & Galli, Silvia, 2014. "Stage-dependent intellectual property rights," Journal of Development Economics, Elsevier, Elsevier, vol. 106(C), pages 239-249.

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