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To Protect Or Not To Protect Foreign-Owned Patents -- A Strategic Decision


  • Tarun Kabiraj


In a three-country framework, with one innovating country, we study the incentives of non-innovating countries to extend patent pro- tection to the innovator's intellectual property. I assume that non- innovating countries differ with respect to their market sizes and/or imitative capabilities. I show that even if patent protection has no effect on the rate of innovation, the more capable imitating country makes an equilibrium decision to provide patent protection, under some conditions. However, as the market size of this country becomes rel- atively large or too small, or if the imitative capability of the other imitating country improves, the earlier decision in favour of patenting is reversed.

Suggested Citation

  • Tarun Kabiraj, 1995. "To Protect Or Not To Protect Foreign-Owned Patents -- A Strategic Decision," Boston University - Institute for Economic Development 60, Boston University, Institute for Economic Development.
  • Handle: RePEc:fth:bosecd:60

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    References listed on IDEAS

    1. Segerstrom, Paul S, 1991. "Innovation, Imitation, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 807-827, August.
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    8. Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-266, April.
    9. Richard R. Nelson & Edmond S. Phelps, 1965. "Investment in Humans, Technological Diffusion and Economic Growth," Cowles Foundation Discussion Papers 189, Cowles Foundation for Research in Economics, Yale University.
    10. Frank R. Lichtenberg, 1992. "R&D Investment and International Productivity Differences," NBER Working Papers 4161, National Bureau of Economic Research, Inc.
    11. Jovanovic, Boyan & Lach, Saul, 1990. "The Diffusion Of Technology And Inequality Among Nations," Working Papers 90-34, C.V. Starr Center for Applied Economics, New York University.
    12. Oulton,Nicholas & O'Mahony,Mary, 1994. "Productivity and Growth," Cambridge Books, Cambridge University Press, number 9780521453455, March.
    13. Parente, Stephen L & Prescott, Edward C, 1994. "Barriers to Technology Adoption and Development," Journal of Political Economy, University of Chicago Press, vol. 102(2), pages 298-321, April.
    14. Samuel Kortum, 1994. "A Model of Research, Patenting, and Productivity Growth," Boston University - Institute for Economic Development 37, Boston University, Institute for Economic Development.
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