On welfare reducing technological change in a North-South framework
Northern firms with patented technology can export goods to Southern markets and incur tariff costs or choose FDI and avoid the tariff. We examine the welfare effects of intellectual property protection under this scenario. When it is beneficial to do so, the Southern government offers patent protection in order to induce FDI. We find that a technological improvement in the North can reduce Southern welfare. After a technological improvement, the South still prefers that North does FDI, however longer patent protection may be required to induce FDI which can result in an overall decrease of Southern welfare. Given this immiserizing effect of technological change, Southern countries may choose to adopt higher cost technologies. We also show that a more effective technology does not necessarily require a longer patent protection to induce FDI. Copyright 2009 , Oxford University Press.
Volume (Year): 61 (2009)
Issue (Month): 3 (July)
|Contact details of provider:|| Postal: |
Fax: 01865 267 985
Web page: http://oep.oupjournals.org/Email:
|Order Information:||Web: http://www.oup.co.uk/journals|
When requesting a correction, please mention this item's handle: RePEc:oup:oxecpp:v:61:y:2009:i:3:p:603-622. 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: (Oxford University Press)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.