Vertical technology transfer and the implications of patent protection
AbstractSignificant amount of vertical technology transfer occurs between developed and developing country firms, yet the literature on intellectual property rights did not pay much attention to this aspect. We show that whether or not the incumbent and the entrant final goods producers are from the same developed country, patent protection in the developing country raises developed-country welfare if (i) patent protection in the developing country deters entry in the final goods market, (ii) the marginal cost difference between the incumbent and the entrant final goods producers is sufficiently small, and (iii) the marginal cost difference between the incumbent and the entrant developing-country firms is sufficiently high.
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Bibliographic InfoPaper provided by University of Nottingham, School of Economics in its series Discussion Papers with number 09/05.
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Entry deterrence; Patent; Vertical technology transfer; Welfare;
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