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Trade-Related Intellectual Property Rights: Theory and Empirics

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  • Olena Ivus

    (University of Calgary)

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    Abstract

    The WTO inspired strengthening of intellectual property rights (IPRs) in developing countries remains highly controversial even 15 years after the 1994 TRIPs agreement. This paper employs both theory and empirics to assess how a strengthening of IPRs affects international technology diffusion by altering the volume of high-tech exports into developing countries. In the context of a North-South general equilibrium model,stronger IPRs encourage Northern firms to introduce new high-tech products in the South. High-tech exports to the South rise, while low-tech exports may fall. International technology diffusion does not necessarily fall. These theoretical predictions are examined empirically. On average,developing countries that strengthened their IPRs under the TRIPs agreement saw an increase of approximately $50 billion (1994 US dollars) in their high-tech imports. This amount is equivalent to a 13% increase in their annual value of high-tech imports.

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    File URL: http://econ.ucalgary.ca/sites/econ.ucalgary.ca.manageprofile/files/unitis/publications/162-34147/IPR_theory_December2008.pdf
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    Bibliographic Info

    Paper provided by Department of Economics, University of Calgary in its series Working Papers with number 2009-02.

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    Date of creation: 29 Jan 2009
    Date of revision: 03 Feb 2009
    Handle: RePEc:clg:wpaper:2009-02

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    1. Ishac Diwan & Dani Rodrik, 1989. "Patents, Appropriate Technology, and North-South Trade," NBER Working Papers 2974, National Bureau of Economic Research, Inc.
    2. Lai, Edwin L. -C., 1998. "International intellectual property rights protection and the rate of product innovation," Journal of Development Economics, Elsevier, vol. 55(1), pages 133-153, February.
    3. Maskus, Keith E. & Penubarti, Mohan, 1995. "How trade-related are intellectual property rights?," Journal of International Economics, Elsevier, vol. 39(3-4), pages 227-248, November.
    4. Mansfield, Edwin & Schwartz, Mark & Wagner, Samuel, 1981. "Imitation Costs and Patents: An Empirical Study," Economic Journal, Royal Economic Society, vol. 91(364), pages 907-18, December.
    5. Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-66, April.
    6. Glass, Amy Jocelyn & Saggi, Kamal, 2002. "Intellectual property rights and foreign direct investment," Journal of International Economics, Elsevier, vol. 56(2), pages 387-410, March.
    7. Ginarte, Juan C. & Park, Walter G., 1997. "Determinants of patent rights: A cross-national study," Research Policy, Elsevier, vol. 26(3), pages 283-301, October.
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