Patent Protection, Innovation Rate and Welfare
AbstractIn the context of international technology transfer from the developed North to the developing South, this paper analyses the impact of the Southern patent protection on the innovation rate in the North and the welfare effect in the South. In a two-period model, we show how the different modes of technology transfers (licensing or subsidiary) affect the R&D incentive and thereby the rate of innovation in the North. It is shown that under the licensing contract, no patent protection in the South is best for the South as it increases the innovation rate in the North, thereby leading to greater welfare in the South. We also argue for certain degree of patent protection in the South for maximization of its welfare under some parameter configurations.
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Bibliographic InfoPaper provided by National University of Singapore, Department of Economics in its series Departmental Working Papers with number wp0106.
Length: 16 pages
Date of creation: Sep 2001
Date of revision:
Technology transfer; Patent protection; Innovation; Welfare;
Find related papers by JEL classification:
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property Rights
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- D45 - Microeconomics - - Market Structure and Pricing - - - Rationing; Licensing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-10-29 (All new papers)
- NEP-DEV-2001-10-29 (Development)
- NEP-INO-2001-10-29 (Innovation)
- NEP-TID-2001-10-29 (Technology & Industrial Dynamics)
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