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Endogenous Enforcement of Intellectual Property, North-South Trade, and Growth

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While most countries have harmonized intellectual property rights (IPR) legislation, the dispute about the optimal level of IPR-enforcement remains. This paper develops an endogenous growth framework with two open economies satisfying the classical North-South assumptions to study (a) IPR-enforcement in a decentralized game and (b) the desired globally-harmonized IPR-enforcement of the two regions. The results are compared to the constrained-efficient enforcement level. Our main insights are: The regions’ desired harmonized enforcement levels are higher than their equilibrium choices, however, the gap between the two shrinks with relative market size. While growth rates substiantially increase when IPR-enforcement is harmonized at the North’s desired level, our numerical simulation suggests that the South may also benefit in terms of long-run welfare.

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  • Andreas Schäfer & Maik T. Schneider, 2011. "Endogenous Enforcement of Intellectual Property, North-South Trade, and Growth," CER-ETH Economics working paper series 11/150, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  • Handle: RePEc:eth:wpswif:11-150
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    More about this item

    Keywords

    Endogenous Growth; Intellectual Property Rights; Trade; Dynamic Game;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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