Intellectual Property Rights Adoption in Developing Countries
AbstractThis paper studies the incentives that developing countries have to enforce intellectual properties rights (IPR). On the one hand, free-riding on rich countries technology reduces the investment cost in R&D. On the other hand, it yields apotential indirect cost: a firm that violates IPR cannot legally export in a country that enforces them. IPR act like a barrier to entry of the advanced economy markets. Moreover free-riders cannot prevent other to copy their own innovation. The analysis, which distinguishes between large and small developing countries, predicts that small ones should be willing to respect IPR if they want to export and access advanced economies markets, while large emerging countries, such as China and India, will be more reluctant to do so as their huge domestic markets develop. Global welfare is higher under the full protection regime if the developing country does not innovate. It is higher under a partial regime if both countries have access to similar R&D technology and the developing country market is large enough.
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Bibliographic InfoPaper provided by Toulouse School of Economics (TSE) in its series TSE Working Papers with number 09-094.
Date of creation: Oct 2009
Date of revision:
Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F15 - International Economics - - Trade - - - Economic Integration
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property Rights
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-05-22 (All new papers)
- NEP-CWA-2010-05-22 (Central & Western Asia)
- NEP-INO-2010-05-22 (Innovation)
- NEP-IPR-2010-05-22 (Intellectual Property Rights)
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