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International Intellectual Property Rights: Effects on Growth, Welfare and Income Inequality

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Abstract

What are the effects of increasing developing countries’ intellectual property rights protection on growth, welfare and income inequality in the global economy? To analyze this question, we develop a two-country R&D-growth model with wealth heterogeneity. We find that the North experiences higher growth and welfare at the expense of higher income inequality while the South experiences higher growth at the expense of lower welfare and higher income inequality. As for global welfare, there exists a critical degree for the domestic importance of foreign goods below (above) which global welfare decreases (increases). In light of these findings, we discuss policy implications on China’s accession to the WTO in 2001. Furthermore, we analyze the effects of China’s rising innovative capability on domestic and foreign income inequality.

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Bibliographic Info

Paper provided by Institute of Economics, Academia Sinica, Taipei, Taiwan in its series IEAS Working Paper : academic research with number 09-A006.

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Length: 34 pages
Date of creation: Jun 2009
Date of revision:
Handle: RePEc:sin:wpaper:09-a006

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Keywords: endogenous growth; heterogeneity; income inequality; patent policy; TRIPS;

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References

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Cited by:
  1. Chu, Angus C. & Leung, Charles Ka Yui & TANG, C. H. Edward, 2012. "Intellectual property rights, technical progress and the volatility of economic growth," MPRA Paper 38132, University Library of Munich, Germany.
  2. Sorek, Gilad, 2011. "Patents and quality growth in OLG economy," Journal of Macroeconomics, Elsevier, vol. 33(4), pages 690-699.

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