IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_4292.html
   My bibliography  Save this paper

Universal Intellectual Property Rights: Too Much of a Good Thing?

Author

Listed:
  • Emmanuelle Auriol
  • Sara Biancini
  • Rodrigo Paillacar

Abstract

This paper studies the incentives that developing countries have to protect intellectual properties rights (IPR). On the one hand, free-riding on rich countries technology reduces their investment cost in R&D. On the other hand, firm that violates IPR cannot legally export in a country that enforces them. Moreover free-riders cannot prevent others to copy their own innovation. The analysis predicts that the willingness to enforce IPR is U-shaped in a country GDP: small/poor countries are willing to respect IPR to access advanced economies markets, while large emerging countries are more reluctant to do so because technological transfers from the West boost their production capacity and their domestic markets. Universal enforcement of IPR yields a higher level of innovation and global welfare only if the developing country does not innovate. A partial enforcement of IPR, strict in the north and lax in the south, is socially better if the developing country invests enough in R&D and if its interior market is large. The theoretical predictions of the model are tested with the help of panel data. The empirical analysis supports the theoretical results.

Suggested Citation

  • Emmanuelle Auriol & Sara Biancini & Rodrigo Paillacar, 2013. "Universal Intellectual Property Rights: Too Much of a Good Thing?," CESifo Working Paper Series 4292, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_4292
    as

    Download full text from publisher

    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp4292.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Malueg, David A. & Schwartz, Marius, 1994. "Parallel imports, demand dispersion, and international price discrimination," Journal of International Economics, Elsevier, vol. 37(3-4), pages 167-195, November.
    2. Diwan, Ishac & Rodrik, Dani, 1991. "Patents, appropriate technology, and North-South trade," Journal of International Economics, Elsevier, vol. 30(1-2), pages 27-47, February.
    3. Dustmann, Christian & Fadlon, Itzhak & Weiss, Yoram, 2011. "Return migration, human capital accumulation and the brain drain," Journal of Development Economics, Elsevier, vol. 95(1), pages 58-67, May.
    4. Gene M. Grossman & Edwin L.-C. Lai, 2004. "International Protection of Intellectual Property," American Economic Review, American Economic Association, vol. 94(5), pages 1635-1653, December.
    5. Szymanski, Stefan & Valletti, Tommaso, 2005. "Parallel Trade, International Exhaustion and Intellectual Property Rights: A Welfare Analysis," CEPR Discussion Papers 5022, C.E.P.R. Discussion Papers.
    6. Nancy Gallini & Suzanne Scotchmer, 2002. "Intellectual Property: When Is It the Best Incentive System?," NBER Chapters,in: Innovation Policy and the Economy, Volume 2, pages 51-78 National Bureau of Economic Research, Inc.
    7. Li, Changying & Maskus, Keith E., 2006. "The impact of parallel imports on investments in cost-reducing research and development," Journal of International Economics, Elsevier, vol. 68(2), pages 443-455, March.
    8. Valletti, Tommaso M., 2006. "Differential pricing, parallel trade, and the incentive to invest," Journal of International Economics, Elsevier, vol. 70(1), pages 314-324, September.
    9. Keith Head & Thierry Mayer, 2004. "Market Potential and the Location of Japanese Investment in the European Union," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 959-972, November.
    10. Corinne Langinier & GianCarlo Moschini, 2002. "Economics of Patents: An Overview, The," Center for Agricultural and Rural Development (CARD) Publications 02-wp293, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    11. Manon Domingues Dos Santos & Fabien Postel-Vinay, 2003. "Migration as a source of growth: The perspective of a developing country," Journal of Population Economics, Springer;European Society for Population Economics, vol. 16(1), pages 161-175, February.
    12. Chen, Yongmin & Puttitanun, Thitima, 2005. "Intellectual property rights and innovation in developing countries," Journal of Development Economics, Elsevier, vol. 78(2), pages 474-493, December.
    13. Layard, R. & Mayraz, G. & Nickell, S., 2008. "The marginal utility of income," Journal of Public Economics, Elsevier, vol. 92(8-9), pages 1846-1857, August.
    14. Antonio Spilimbergo, 2009. "Democracy and Foreign Education," American Economic Review, American Economic Association, vol. 99(1), pages 528-543, March.
    15. Alireza Naghavi & Chiara Strozzi, 2011. "Intellectual Property Rights, Migration, and Diaspora," Working Papers 2011.60, Fondazione Eni Enrico Mattei.
    16. Lai, Edwin L. -C. & Qiu, Larry D., 2003. "The North's intellectual property rights standard for the South?," Journal of International Economics, Elsevier, vol. 59(1), pages 183-209, January.
    17. Gene M. Grossman & Edwin L.-C. Lai, 2008. "Parallel imports and price controls," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 378-402.
    18. Smith, Pamela J., 1999. "Are weak patent rights a barrier to U.S. exports?," Journal of International Economics, Elsevier, vol. 48(1), pages 151-177, June.
    19. Maskus, Keith E. & Penubarti, Mohan, 1995. "How trade-related are intellectual property rights?," Journal of International Economics, Elsevier, vol. 39(3-4), pages 227-248, November.
    20. Redding, Stephen & Venables, Anthony J., 2004. "Economic geography and international inequality," Journal of International Economics, Elsevier, vol. 62(1), pages 53-82, January.
    21. Helpman, Elhanan, 1993. "Innovation, Imitation, and Intellectual Property Rights," Econometrica, Econometric Society, vol. 61(6), pages 1247-1280, November.
    22. Park, Walter G., 2008. "International patent protection: 1960-2005," Research Policy, Elsevier, vol. 37(4), pages 761-766, May.
    23. Margaret K. Kyle & Anita M. McGahan, 2012. "Investments in Pharmaceuticals Before and After TRIPS," The Review of Economics and Statistics, MIT Press, vol. 94(4), pages 1157-1172, November.
    24. Diego A. Comin & Bart Hobijn, 2009. "The CHAT Dataset," Harvard Business School Working Papers 10-035, Harvard Business School.
    25. Chin, J.C. & Grossman, G.M., 1988. "Intellectual Property Rigths And North-South Trade," Papers 143, Princeton, Woodrow Wilson School - Public and International Affairs.
    26. Braga, C.A.P. & Fink, C. & Sepulveda, C.P., 2000. "Intellectual Property Rights and Economic Development," World Bank - Discussion Papers 412, World Bank.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    intellectual property rights; innovation; imitation; oligopoly; trade policy; developing countries;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_4292. 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: (Klaus Wohlrabe). General contact details of provider: http://edirc.repec.org/data/cesifde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.