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Intellectual Property Rights and Skills Accumulation: A North-South Model of FDI and Outsourcing

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  • Chen, Hung-Ju

Abstract

This study investigates the effects of stronger intellectual property rights (IPR) protection in the South on innovation, skills choice, wage inequality and patterns of production based on a North-South general-equilibrium model with foreign direct investment (FDI) and international outsourcing. We find that stronger IPR protection in the South raises the extent of outsourcing and reduces the extent of FDI. This raises the proportion of Southerners being unskilled and mitigates wage inequality in the South. In the North, stronger Southern IPR protection raises the proportion of Northerners being skilled and wage inequality. The effects of international specialization, R&D cost and Northern population are also examined.

Suggested Citation

  • Chen, Hung-Ju, 2013. "Intellectual Property Rights and Skills Accumulation: A North-South Model of FDI and Outsourcing," MPRA Paper 45035, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:45035
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    References listed on IDEAS

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    Cited by:

    1. Hung-Ju Chen, 2015. "Innovation and Intellectual Property Rights in a Product-cycle Model of Skills Accumulation," Review of International Economics, Wiley Blackwell, vol. 23(2), pages 320-344, May.
    2. Chen, Hung-Ju, 2018. "Innovation And Imitation: Effects Of Intellectual Property Rights In A Product-Cycle Model Of Skills Accumulation," Macroeconomic Dynamics, Cambridge University Press, vol. 22(6), pages 1475-1509, September.

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    More about this item

    Keywords

    FDI; Outsourcing; Quality ladder; Skill; Wage inequality.;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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