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Endogenous imitation and endogenous growth in a North-South model: A theoretical analysis

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  • Mondal, Debasis
  • Ranjan Gupta, Manash

Abstract

This paper presents a modified version of the North-South endogenous imitation model of Grossman and Helpman [Grossman, G., Helpman, E., 1991b. Endogenous product cycles. The Economic Journal 101, 1241-1229] based on the product variety framework. We show that a tighter Intellectual Property Rights (IPR) protection in the South leads to an increase in the rate of innovation in the North in the steady state equilibrium. We also analyse some transitional dynamic properties of this modified model and derive comparative dynamic effects on the North-South relative wage with respect to changes in the IPR protection parameter. We also focus on the welfare effects of the policy of IPR strengthening. The South may have a welfare gain in this model when the IPR protection policy is strengthened. This result is different from that obtained in Helpman [Helpman, E., 1993. Innovation, imitation, and intellectual property rights. Econometrica 61(6), 1247-1280] model where IPR strengthening causes welfare loss of the South.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:jmacro:v:31:y:2009:i:4:p:668-684
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    References listed on IDEAS

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    1. Mondal, Debasis, 2008. "Stability analysis of the Grossman-Helpman model of endogenous product cycles," Journal of Macroeconomics, Elsevier, vol. 30(3), pages 1302-1322, September.
    2. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders in the Theory of Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(1), pages 43-61.
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    2. 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.
    3. Kazuyoshi Ohki, 2017. "International intellectual property rights protection and economic growth with costly transfer," Review of International Economics, Wiley Blackwell, vol. 25(5), pages 1130-1154, November.
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    6. Leite, Duarte N. & Afonso, Óscar & Silva, Sandra T., 2019. "A tale of two countries: Directed technical change, trade and migratory movements," Economic Modelling, Elsevier, vol. 83(C), pages 173-194.

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