IDEAS home Printed from https://ideas.repec.org/a/eee/ecmode/v38y2014icp112-120.html
   My bibliography  Save this article

Endogenous growth and intellectual property rights: A north–south modeling proposal

Author

Listed:
  • Azevedo, Mónica L.
  • Afonso, Óscar
  • Silva, Sandra T.

Abstract

In this paper, we develop a general equilibrium endogenous growth model that emphasizes the IPR enforcement effects on growth, in a scenario of north–south technological knowledge diffusion. The economy consists of three sectors, and firms are engaged in step-by-step innovation. In line with the literature, we introduce an IPR parameter that makes imitation more difficult. We find that, in steady state, the increases in IPR protection result in decreases in the growth rate. This result is in line with the literature, which argues that the enforcement of IPR does not always have a positive effect on economic growth. To sum up, we present some suggestions for future research which can help to clarify the relationship between IPR and endogenous growth.

Suggested Citation

  • Azevedo, Mónica L. & Afonso, Óscar & Silva, Sandra T., 2014. "Endogenous growth and intellectual property rights: A north–south modeling proposal," Economic Modelling, Elsevier, vol. 38(C), pages 112-120.
  • Handle: RePEc:eee:ecmode:v:38:y:2014:i:c:p:112-120
    DOI: 10.1016/j.econmod.2013.12.021
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264999313005701
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Usha Nair-Reichert & Roderick Duncan, 2008. "Patent Regimes, Host Country Policies, and the Nature of MNE Activities," Review of International Economics, Wiley Blackwell, vol. 16(4), pages 783-797, September.
    2. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders and Product Cycles," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 557-586.
    3. Gould, David M. & Gruben, William C., 1996. "The role of intellectual property rights in economic growth," Journal of Development Economics, Elsevier, vol. 48(2), pages 323-350, March.
    4. Cozzi, Guido & Giordani, Paolo E. & Zamparelli, Luca, 2007. "The refoundation of the symmetric equilibrium in Schumpeterian growth models," Journal of Economic Theory, Elsevier, vol. 136(1), pages 788-797, September.
    5. Furukawa, Yuichi, 2007. "The protection of intellectual property rights and endogenous growth: Is stronger always better?," Journal of Economic Dynamics and Control, Elsevier, vol. 31(11), pages 3644-3670, November.
    6. Gene M. Grossman & Edwin L.-C. Lai, 2004. "International Protection of Intellectual Property," American Economic Review, American Economic Association, vol. 94(5), pages 1635-1653, December.
    7. Michelle P. Connolly & Diego Valderrama, 2005. "North-South technological diffusion and dynamic gains from trade," Working Paper Series 2004-24, Federal Reserve Bank of San Francisco.
    8. Luis A. Rivera-Batiz & Paul M. Romer, 1991. "Economic Integration and Endogenous Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 531-555.
    9. Chu, Angus C. & Leung, Charles K.Y. & Tang, Edward, 2012. "Intellectual property rights, technical progress and the volatility of economic growth," Journal of Macroeconomics, Elsevier, vol. 34(3), pages 749-756.
    10. Mansfield, Edwin & Schwartz, Mark & Wagner, Samuel, 1981. "Imitation Costs and Patents: An Empirical Study," Economic Journal, Royal Economic Society, vol. 91(364), pages 907-918, December.
    11. Haibin Wu, 2010. "Distance to frontier, intellectual property rights, and economic growth," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 19(2), pages 165-183.
    12. Chu, Angus C., 2009. "Macroeconomic Effects of Intellectual Property Rights: A Survey," MPRA Paper 17342, University Library of Munich, Germany.
    13. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    14. Kim, Yee Kyoung & Lee, Keun & Park, Walter G. & Choo, Kineung, 2012. "Appropriate intellectual property protection and economic growth in countries at different levels of development," Research Policy, Elsevier, vol. 41(2), pages 358-375.
    15. Ryo Horii & Tatsuro Iwaisako, 2007. "Economic Growth with Imperfect Protection of Intellectual Property Rights," Journal of Economics, Springer, vol. 90(1), pages 45-85, January.
    16. Eicher, Theo & García-Peñalosa, Cecilia, 2008. "Endogenous strength of intellectual property rights: Implications for economic development and growth," European Economic Review, Elsevier, vol. 52(2), pages 237-258, February.
    17. Dinopoulos, Elias & Segerstrom, Paul, 2010. "Intellectual property rights, multinational firms and economic growth," Journal of Development Economics, Elsevier, vol. 92(1), pages 13-27, May.
    18. Maurice Obstfeld & Kenneth S. Rogoff, 1996. "Foundations of International Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262150476, January.
    19. Alireza Naghavi, 2007. "Strategic Intellectual Property Rights Policy and North-South Technology Transfer," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(1), pages 55-78, April.
    20. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    21. Lai, Edwin L. -C. & Qiu, Larry D., 2003. "The North's intellectual property rights standard for the South?," Journal of International Economics, Elsevier, vol. 59(1), pages 183-209, January.
    22. Furukawa, Yuichi, 2010. "Intellectual property protection and innovation: an inverted-U relationship," Economics Letters, Elsevier, vol. 109(2), pages 99-101, November.
    23. Michel Trommetter, 2010. "Flexibility in the implementation of intellectual property rights in agricultural biotechnology," European Journal of Law and Economics, Springer, vol. 30(3), pages 223-245, December.
    24. Nelson Sá & Michelle Connolly & Pietro Peretto, 2009. "Sustaining The Goose That Lays The Golden Egg: A Continuous Treatment Of Technological Transfer," Scottish Journal of Political Economy, Scottish Economic Society, vol. 56(s1), pages 492-507, September.
    25. Daron Acemoglu & Ufuk Akcigit, 2012. "Intellectual Property Rights Policy, Competition And Innovation," Journal of the European Economic Association, European Economic Association, vol. 10(1), pages 1-42, February.
    26. 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.
    27. Helpman, Elhanan, 1993. "Innovation, Imitation, and Intellectual Property Rights," Econometrica, Econometric Society, vol. 61(6), pages 1247-1280, November.
    28. Barro, Robert J & Sala-i-Martin, Xavier, 1997. "Technological Diffusion, Convergence, and Growth," Journal of Economic Growth, Springer, vol. 2(1), pages 1-26, March.
    29. 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.
    30. Ginarte, Juan C. & Park, Walter G., 1997. "Determinants of patent rights: A cross-national study," Research Policy, Elsevier, vol. 26(3), pages 283-301, October.
    31. Samuel S. Kortum, 1997. "Research, Patenting, and Technological Change," Econometrica, Econometric Society, vol. 65(6), pages 1389-1420, November.
    32. Rod Falvey & Neil Foster & David Greenaway, 2009. "Trade, imitative ability and intellectual property rights," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(3), pages 373-404, October.
    33. Kortum, Samuel, 1993. "Equilibrium R&D and the Patent-R&D Ratio: U.S. Evidence," American Economic Review, American Economic Association, vol. 83(2), pages 450-457, May.
    34. Walter G. Park & Douglas Lippoldt, 2006. "International licensing and the strengthening of intellectual property rights in developing countries during the 1990s," OECD Economic Studies, OECD Publishing, vol. 2005(1), pages 7-48.
    35. Olena Ivus, 2011. "Trade-related intellectual property rights: industry variation and technology diffusion," Canadian Journal of Economics, Canadian Economics Association, vol. 44(1), pages 201-226, February.
    36. Mondal, Debasis & Ranjan Gupta, Manash, 2009. "Endogenous imitation and endogenous growth in a North-South model: A theoretical analysis," Journal of Macroeconomics, Elsevier, vol. 31(4), pages 668-684, December.
    37. Bin Xu & Eric CHiang, 2005. "Trade, Patents and International Technology Diffusion," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 14(1), pages 115-135.
    38. Oscar Afonso, 2012. "Scale-independent North-South trade effects on the technological-knowledge bias and on wage inequality," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(1), pages 181-207, April.
    39. Anusua Datta & Hamid Mohtadi, 2006. "Endogenous Imitation and Technology Absorption in a Model of North-South Trade," International Economic Journal, Taylor & Francis Journals, vol. 20(4), pages 431-459.
    40. Yang, Guifang & Maskus, Keith E., 2001. "Intellectual property rights, licensing, and innovation in an endogenous product-cycle model," Journal of International Economics, Elsevier, vol. 53(1), pages 169-187, February.
    41. Andreas Panagopoulos, 2009. "Revisiting the link between knowledge spillovers and growth: an intellectual property perspective," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 18(6), pages 533-546.
    42. Akiyama, Taro & Furukawa, Yuichi, 2009. "Intellectual property rights and appropriability of innovation," Economics Letters, Elsevier, vol. 103(3), pages 138-141, June.
    43. Taylor, M Scott, 1994. "TRIPs, Trade, and Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(2), pages 361-381, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Odilova, Shoirahon, 2016. "Patent protection, intelligence and economic growth: a cross-country empirical investigation," MPRA Paper 70842, University Library of Munich, Germany.
    2. Niwa, Sumiko, 2016. "Patent claims and economic growth," Economic Modelling, Elsevier, vol. 54(C), pages 377-381.
    3. Collins, Tracy, 2015. "Imitation: A catalyst for innovation and endogenous growth," Economic Modelling, Elsevier, vol. 51(C), pages 299-307.
    4. Odilova, Shoirahon & Xiaomin, Gu, 2016. "IPR protection, intelligence and economic growth: a cross-country empirical investigation," MPRA Paper 71226, University Library of Munich, Germany.

    More about this item

    Keywords

    Intellectual Property Rights (IPR); Economic growth; North–south model;

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:38:y:2014:i:c:p:112-120. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/inca/30411 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.