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Cross-border intellectual property rights: contract enforcement and absorptive capacity

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  • A. Naghavi
  • Y. Tsai

Abstract

This paper studies cross-border intellectual property rights (IPR) as a North-South contract using a Nash bargaining approach and distinguishes between the outcome and its actual enforcement. The absorptive capacity of the Southern country to exploit technology transfer plays a key role in the negotiated level of IPRs and its post-treaty enforcement. The optimal level of IPR protection relates positively to absorptive capacity. This provides a rationale for the longer time-frame provided to least developed countries in Article 66 of TRIPS to implement its provisions. In addition, monitoring is only effective in preventing contract violation up to a critical level of absorptive capacity. We relate this to the US Trade Representative “Special 301” report, which flags countries that deny adequate IPR protection as “priority watch list”. While disputes with less developed economies are promptly resolved, emerging economies, where most losses from copyright piracy originates from, continue to remain on the list.

Suggested Citation

  • A. Naghavi & Y. Tsai, 2012. "Cross-border intellectual property rights: contract enforcement and absorptive capacity," Working Papers wp809, Dipartimento Scienze Economiche, Universita' di Bologna.
  • Handle: RePEc:bol:bodewp:wp809
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    References listed on IDEAS

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    Cited by:

    1. Lei Yang & Yingyi Tsai & Arijit Mukherjee, 2016. "Intellectual Property Rights and the Quality of Transferred Technology in Developing Countries," Review of Development Economics, Wiley Blackwell, vol. 20(1), pages 239-249, February.
    2. Jie Li & Xiaohui Xu & Jing Lu, 2015. "Negotiation over Intellectual Property Rights Protection in a Mixed Market," Review of Development Economics, Wiley Blackwell, vol. 19(4), pages 759-775, November.

    More about this item

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

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