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Welfare Effects of Intellectual Property Rights Under Asymmetric Spillovers

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  • Kim, Jeong Eon
  • Lapan, Harvey E.

Abstract

We develop a model with one innovating northern firm and several heterogeneous Southern firms that compete in a final product market. We assume the southern firms differ in their ability to adapt technology and use this heterogeneity to study the differing incentives of southern governments to protect intellectual property rights. We find that governments representing more efficient firms have greater incentive to protect IPR than do those representing less efficient firms. However, efficiency considerations imply that, given policies resulting in the same overall innovation rate, it would be better to have weaker IPR protection for the more efficient southern firms.

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File URL: http://www.econ.iastate.edu/sites/default/files/publications/papers/p3904-2004-10-23.pdf
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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12206.

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Date of creation: 23 Oct 2004
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Handle: RePEc:isu:genres:12206

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
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Web page: http://www.econ.iastate.edu
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Keywords: innovation; imperfect competition; commercial policy; intellectual property rights protection; trade;

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  1. Chin, J.C. & Grossman, G.M., 1988. "Intellectual Property Rigths And North-South Trade," Papers 143, Princeton, Woodrow Wilson School - Public and International Affairs.
  2. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-96, September.
  3. Yong Yang, 1998. "Why Do Southern Countries Have Little Incentive to Protect Northern Intellectual Property Rights?," Canadian Journal of Economics, Canadian Economics Association, vol. 31(4), pages 800-816, November.
  4. Zigic, Kresimir, 1998. "Intellectual property rights violations and spillovers in North-South trade," European Economic Review, Elsevier, vol. 42(9), pages 1779-1799, November.
  5. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3), pages 783-832.
  6. Deardorff, Alan V, 1992. "Welfare Effects of Global Patent Protection," Economica, London School of Economics and Political Science, vol. 59(233), pages 35-51, February.
  7. Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, vol. 82(5), pages 1293-306, December.
  8. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1988. "Appropriating the Returns from Industrial R&D," Cowles Foundation Discussion Papers 862, Cowles Foundation for Research in Economics, Yale University.
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