Imitation and Innovation Driven Development under Imperfect Intellectual Property Rights
AbstractOne of the main channels through which intellectual property rights (IPRs) influence a country's economy is through their impact on innovation. However, North-South models usually constrain the South to imitative activity which generates a detrimental effect of stronger IPRs on southern welfare by construction. Further, this assumption does not account for the increasing R&D efforts in developing countries in the last decades. To study the effects of IPR protection conditional on a country's development, we present a North-South variety model which allows for original southern R&D activity and imitation specifically targeted to southern innovations. We find that the effects of IPRs depend crucially on the stage of development of a country in terms of R&D activity. In particular, we show that strengthening IPRs promotes southern R&D, increases southern real consumption and decreases the wage gap between North and South if IPRs pass a threshold level. Below this threshold, an increase in IPRs may fail to promote R&D while decreasing real consumption and wages in the South.
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Bibliographic InfoPaper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c015_056.
Length: 34 pages
Date of creation: Sep 2010
Date of revision:
Innovation; Imitation; Economic Growth; Intellectual Property Rights;
Other versions of this item:
- Lorenczik, Christian & Newiak, Monique, 2012. "Imitation and innovation driven development under imperfect intellectual property rights," European Economic Review, Elsevier, vol. 56(7), pages 1361-1375.
- 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
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
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