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Innovation, Imitation, and Intellectual Property Rights

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Elhanan Helpman

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Abstract

The debate between the North and the South about the enforcement of intellectual property rights in the South is examined within a dynamic general equilibrium framework in which the North innovates new products and the South imitates them. A welfare evaluation of a policy of tighter intellectual property rights is provided by decomposing a region's welfare change into four components: terms of trade, production composition, available product choice and intertemporal allocation of consumption spending. The paper provides a theoretical evaluation of each one of these components and their relative size. The analysis proceeds in stages. It begins with an exogenous rate of innovation in order to focus on the first two components. The last two components are added by endogenizing the rate of innovation. Finally, the paper considers the role of foreign direct investment.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4081.

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Date of creation: May 1992
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Publication status: published as Econometrica, Vol. 61, pp. 1247-1280
Handle: RePEc:nbr:nberwo:4081

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  1. Diwan, Ishac & Rodrik, Dani, 1991. "Patents, appropriate technology, and North-South trade," Journal of International Economics, Elsevier, vol. 30(1-2), pages 27-47, February. [Downloadable!] (restricted)
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  2. 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. [Downloadable!] (restricted)
  3. 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. [Downloadable!] (restricted)
  4. Diamond, Peter A., 1980. "An alternative to steady-state comparisons," Economics Letters, Elsevier, vol. 5(1), pages 7-9. [Downloadable!] (restricted)
  5. Feinberg, Robert M & Rousslang, Donald J, 1990. "The Economic Effects of Intellectual Property Right Infringements," Journal of Business, University of Chicago Press, vol. 63(1), pages 79-90, January. [Downloadable!] (restricted)
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