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Dynamic Gains from Trade Agreements with Intellectual Property Provisions

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  • Ana Maria Santacreu

Abstract

I develop a quantitative multi-country trade model of innovation and technology licensing to study short- and long-term effects of trade agreements with intellectual property (IP) provisions. A trade agreement involves determining the level of tariffs and IP protection as Nash bargaining between a developed and a developing country. The agreement increases welfare, innovation, and growth in the long run. However, gains accrue differently across countries along the transition. Developing countries experience short-run losses, as they now pay higher licensing prices. An agreement designed by a politically-motivated government could mitigate these losses, but at the expense of lower growth and welfare.

Suggested Citation

  • Ana Maria Santacreu, 2021. "Dynamic Gains from Trade Agreements with Intellectual Property Provisions," Working Papers 2021-010, Federal Reserve Bank of St. Louis, revised 05 Sep 2022.
    • Handle: RePEc:fip:fedlwp:93276
    DOI: 10.20955/wp.2021.010
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    References listed on IDEAS

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    More about this item

    Keywords

    technology licensing; trade agreements; intellectual property rights;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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