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Location, taxation and governments: An exchange theory of intellectual property

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  • Davidson, Sinclair
  • Mohan, Vijay
  • Potts, Jason

Abstract

The standard economic model of intellectual property is an efficient property rights solution to a market failure problem of investment in a non-rival and non-excludable good. We propose an exchange theory of intellectual property based on a contracting approach in the context of market-making and enforcement of economic rights in exchange for monopoly taxation rights. We use a Hotelling (1929) type spatial model to show the relationship between location and pricing decisions of innovating firms under differing intellectual property, institutional quality, and taxation regimes.

Suggested Citation

  • Davidson, Sinclair & Mohan, Vijay & Potts, Jason, 2020. "Location, taxation and governments: An exchange theory of intellectual property," Journal of Economic Behavior & Organization, Elsevier, vol. 169(C), pages 266-283.
    • Handle: RePEc:eee:jeborg:v:169:y:2020:i:c:p:266-283
    DOI: 10.1016/j.jebo.2019.11.018
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    References listed on IDEAS

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    Cited by:

    1. Jinqiu Li & Yuyou Zou & Mingqiu Li, 2022. "Synergetic evolution of the regional intellectual property management systems in China based on logistic model," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3736-3750, December.

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    More about this item

    Keywords

    Intellectual property; Hotelling model; Tax competition; Tax harmonization; Strategic trade policy;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • F1 - International Economics - - Trade
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • K3 - Law and Economics - - Other Substantive Areas of Law

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