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International intellectual property rights: Effects on growth, welfare and income inequality

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  • Chu, Angus C.
  • Peng, Shin-Kun

Abstract

What are the effects of strengthening developing countries' protection for intellectual property rights on economic growth and income inequality in the global economy? To analyze this question, we develop a two-country R&D-based growth model with wealth heterogeneity. In this growth-theoretic framework, we show that strengthening patent protection in either country increases economic growth and income inequality in both countries. Furthermore, we derive the Nash equilibrium level of patent breadth and find that it is sub-optimally low relative to globally optimal patent breadth due to the positive externality effects that are captured by a spillover parameter.

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  • Chu, Angus C. & Peng, Shin-Kun, 2011. "International intellectual property rights: Effects on growth, welfare and income inequality," Journal of Macroeconomics, Elsevier, vol. 33(2), pages 276-287, June.
    • Handle: RePEc:eee:jmacro:v:33:y:2011:i:2:p:276-287
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    Cited by:

    1. 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.
    2. Chen, Hung-Ju, 2019. "Innovation and FDI: Does the Target of Intellectual Property Rights Matter?," MPRA Paper 94692, University Library of Munich, Germany.
    3. Angus C. Chu, 2009. "Macroeconomic Effects of Intellectual Property Rights: A Survey," IEAS Working Paper : academic research 09-A007, Institute of Economics, Academia Sinica, Taipei, Taiwan.
    4. Zhang, Jingjing & Leoncini, Riccardo & Tsai, Yingyi, 2018. "Intellectual property rights protection, labour mobility and wage inequality," Economic Modelling, Elsevier, vol. 70(C), pages 239-244.
    5. Yu, Po-yang & Lai, Ching-chong, 2020. "Optimal Privatization and Economic Growth in a Schumpeterian Economy," Journal of Macroeconomics, Elsevier, vol. 64(C).
    6. Neves, Pedro Cunha & Afonso, Oscar & Silva, Diana & Sochirca, Elena, 2021. "The link between intellectual property rights, innovation, and growth: A meta-analysis," Economic Modelling, Elsevier, vol. 97(C), pages 196-209.
    7. Chen, Hung-Ju, 2021. "Innovation and FDI: Does the target of intellectual property rights protection matter?," Journal of International Money and Finance, Elsevier, vol. 118(C).
    8. Sefa Awaworyi Churchill & Hoang M. Luong & Mehmet Ugur, 2022. "Does intellectual property protection deliver economic benefits? A multi‐outcome meta‐regression analysis of the evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 36(5), pages 1477-1509, December.
    9. Sorek, Gilad, 2011. "Patents and quality growth in OLG economy," Journal of Macroeconomics, Elsevier, vol. 33(4), pages 690-699.
    10. Christian Kiedaisch, 2021. "Growth and welfare effects of intellectual property rights when consumers differ in income," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(4), pages 1121-1170, November.
    11. Zheng, Zhijie & Huang, Chien-Yu & Yang, Yibai, 2020. "Patent protection, innovation, and technology transfer in a Schumpeterian economy," European Economic Review, Elsevier, vol. 129(C).
    12. Eric W. Bond & Ben Zissimos, 2017. "Patent Breadth In An International Setting," Economic Inquiry, Western Economic Association International, vol. 55(3), pages 1538-1555, July.
    13. Chu, Angus, 2021. "Macroeconomic Effects of Intellectual Property Rights: An Updated Survey," MPRA Paper 110839, University Library of Munich, Germany.
    14. Yuki Saito, 2018. "On the trade, growth, and welfare effects of intellectual property rights protection," Southern Economic Journal, John Wiley & Sons, vol. 85(1), pages 235-254, July.
    15. Petar Stankov, 2017. "Economic Freedom and Welfare Before and After the Crisis," Springer Books, Springer, number 978-3-319-62497-6, September.

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    More about this item

    Keywords

    Economic growth Income inequality International intellectual property rights;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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