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A Theory of North-South Trade and Globalization

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Author Info
Dinopoulos, Elias
Segerstrom, Paul

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Abstract

This Paper develops a dynamic general equilibrium model of North-South trade with scale-invariant growth. Northern firms devote resources to innovative R&D to discover higher quality products and Southern firms devote resources to imitative R&D to copy state-of-the-art quality Northern products. Both innovation and imitation rates are endogenously determined as well as the degree of wage inequality between Northern and Southern workers. The steady-state effects of globalization and stronger protection of intellectual property are analysed. It is shown that globalization leads to more copying of Northern products, faster technological change, and less wage inequality between Northern and Southern workers. Stronger intellectual property protection has the opposite steady-state effects and thus serves to moderate the effects of globalization.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4140.

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Date of creation: Dec 2003
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Handle: RePEc:cpr:ceprdp:4140

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Related research
Keywords: economic growth; globalization; intellectual property rights; north-south trade;

Other versions of this item:

Find related papers by JEL classification:
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
O34 - Economic Development, Technological Change, and Growth - - Technological Change - - - Intellectual Property Rights

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  3. Charles I. Jones, . "On the Evolution of the World Income Distribution," Working Papers 97009, Stanford University, Department of Economics. [Downloadable!]
    Other versions:
  4. Segerstrom, Paul S, 1998. "Endogenous Growth without Scale Effects," American Economic Review, American Economic Association, vol. 88(5), pages 1290-1310, December. [Downloadable!] (restricted)
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    Other versions:
  10. Dinopoulos, Elias & Thompson, Peter, 1998. " Schumpeterian Growth without Scale Effects," Journal of Economic Growth, Springer, vol. 3(4), pages 313-35, December. [Downloadable!] (restricted)
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  12. Yang, Guifang & Maskus, Keith E., 2001. "Intellectual property rights, licensing, and innovation in an endogenous product-cycle model," Journal of International Economics, Elsevier, vol. 53(1), pages 169-187, February. [Downloadable!] (restricted)
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    Other versions:
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    Other versions:
  15. Segerstrom, Paul S & Anant, T C A & Dinopoulos, Elias, 1990. "A Schumpeterian Model of the Product Life Cycle," American Economic Review, American Economic Association, vol. 80(5), pages 1077-91, December. [Downloadable!] (restricted)
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  18. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-51, April. [Downloadable!] (restricted)
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  19. Segerstrom, Paul S., 1999. "Intel Economics," Working Paper Series 524, Research Institute of Industrial Economics.
    Other versions:
  20. 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. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Testsugen Haruyama & Ken-ichi Hashimoto, 2007. "Technological Leaders and Followers in a World Economy," DEGIT Conference Papers c012_010, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
  2. Segerstrom, Paul, 2003. "Naomi Klein and the Anti-Globalization Movement," CEPR Discussion Papers 4141, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  3. Gilles Koléda, 2005. "Northern and Southern Patent Novelty Requirements Harmonization, Growth and Trade," DEGIT Conference Papers c010_025, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
    Other versions:
  4. Alessandra Bonfiglioli & Gino Gancia, 2007. "North-South Trade and Directed Technical Change," UFAE and IAE Working Papers 713.07, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC), revised 27 Jun 2008. [Downloadable!]
    Other versions:
  5. Wolf-Heimo Grieben, 2006. "Globalization with Labor Market Frictions and Non-Scale Growth," DEGIT Conference Papers c011_053, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
    Other versions:
  6. Ryo Horii & Tatsuro Iwaisako, 2005. "Economic Growth with Imperfect Protection of Intellectual Property Rights," Discussion Papers in Economics and Business 05-23-Rev., Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP), revised Apr 2006. [Downloadable!]
    Other versions:
  7. Wolfgang Keller & Carol H. Shiue, 2004. "Market Integration and Economic Development: A Long-run Comparison," NBER Working Papers 10300, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  8. Stryszowski, Piotr, 2006. "Intellectual property rights, globalization and growth," Discussion Paper 76, Tilburg University, Center for Economic Research. [Downloadable!]
  9. Óscar Afonso & Álvaro Aguiar, 2005. "Price-Channel Effects of North-South Trade on the Direction of Technological Knowledge and Wage Inequality," FEP Working Papers 170, Universidade do Porto, Faculdade de Economia do Porto. [Downloadable!]
  10. Hitoshi Tanaka & Tatsuro Iwaisako & Koichi Futagami, 2006. "Dynamic Analysis of Innovation and Licensing: The Effects of Intellectual Property Rights Protection," Discussion Papers in Economics and Business 06-06, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  11. Gino Gancia & Fabrizio Zilibotti, 2005. "Horizontal Innovation in the Theory of Growth and Development," Economics Working Papers 831, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
    Other versions:
  12. Wolf-Heimo GRIEBEN, 2004. "Globalization, Labor Market Rigidities and Multiple Equilibria," DEGIT Conference Papers c009_020, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
  13. Gilles Koléda, 2007. "A Two-countries Two-R&D-sectors Model of Growth and Trade," DEGIT Conference Papers c012_009, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
  14. Afonso, Oscar, 2008. "The impact of government intervention on wage inequality without scale effects," Economic Modelling, Elsevier, vol. 25(2), pages 351-362, March. [Downloadable!] (restricted)
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