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Innovation, Licensing, and Imitation: The Effects of Intellectual Property Rights Protection and Industrial Policy

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Author Info

  • Koichi Futagami

    ()
    (Graduate School of Economics, Osaka University)

  • Tatsuro Iwaisako

    ()
    (Faculty of Economics, Ritsumeikan University)

  • Hitoshi Tanaka

    ()
    (Graduate School of Economics, Osaka University)

Abstract

This paper examines the long-run effects of intellectual property rights (IPR) protection and industrial policies on innovation and technology transfer using a North-South quality ladder model where licensing is the main mode of technology transfer to developing countries. We show that the governments of developing countries can promote innovation and technology transfer by strengthening IPR protection, which is enforced by restricting the imitation of products. Moreover, the results also imply that subsidies on the cost of license negotiation can promote innovation and technology transfer, whereas subsidies on the cost of R&D have no effect.

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File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/0705.pdf
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Bibliographic Info

Paper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 07-05.

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Length: 45 pages
Date of creation: Feb 2007
Date of revision:
Handle: RePEc:osk:wpaper:0705

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Web page: http://www.econ.osaka-u.ac.jp/
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Keywords: Licensing; Imitation; Innovation; Intellectual property rights;

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  1. Coe, David T & Helpman, Elhanan & Hoffmaister, Alexander W, 1997. "North-South R&D Spillovers," Economic Journal, Royal Economic Society, vol. 107(440), pages 134-49, January.
  2. Lai, Edwin L. -C., 1998. "International intellectual property rights protection and the rate of product innovation," Journal of Development Economics, Elsevier, vol. 55(1), pages 133-153, February.
  3. Ozawa, Terutomo, 1980. "Government Control over Technology Acquisition and Firms' Entry into New Sectors: The Experience of Japan's Synthetic-Fibre Industry," Cambridge Journal of Economics, Oxford University Press, vol. 4(2), pages 133-46, June.
  4. Benhabib Jess & Perli Roberto, 1994. "Uniqueness and Indeterminacy: On the Dynamics of Endogenous Growth," Journal of Economic Theory, Elsevier, vol. 63(1), pages 113-142, June.
  5. Kwan, Yum K. & Lai, Edwin L. -C., 2003. "Intellectual property rights protection and endogenous economic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 27(5), pages 853-873, March.
  6. Jocelyn Glass, Amy & Saggi, Kamal, 2002. "Licensing versus direct investment: implications for economic growth," Journal of International Economics, Elsevier, vol. 56(1), pages 131-153, January.
  7. Grinols, Earl & Lin, Hwan C., 2006. "Global patent protection: channels of north and south welfare gain," Journal of Economic Dynamics and Control, Elsevier, vol. 30(2), pages 205-227, February.
  8. Glass, Amy Jocelyn & Saggi, Kamal, 2002. "Intellectual property rights and foreign direct investment," Journal of International Economics, Elsevier, vol. 56(2), pages 387-410, March.
  9. Tanaka, Hitoshi & Iwaisako, Tatsuro & Futagami, Koichi, 2007. "Dynamic analysis of innovation and international transfer of technology through licensing," Journal of International Economics, Elsevier, vol. 73(1), pages 189-212, September.
  10. Guifang Yang & Keith Maskus, 2001. "Intellectual property rights and licensing: An econometric investigation," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 137(1), pages 58-79, March.
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