IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-03475023.html
   My bibliography  Save this paper

Universal intellectual property rights: Too much of a good thing?

Author

Listed:
  • Emmanuelle Auriol

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Sara Biancini

    (THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université)

  • Rodrigo Paillacar

    (THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université)

Abstract

Developing countries' incentives to protect intellectual property rights (IPR) are studied in a model of vertical innovation. Enforcing IPR boosts export opportunities to advanced economies but slows down technological transfers and incentives to invest in R&D. Asymmetric protection of IPR, strict in the North and lax in the South, leads in many cases to a higher world level of innovation than universal enforcement. IPR enforcement is U-shaped in the relative size of the export market compared to the domestic one: rich countries and small/poor countries enforce IPR, the former to protect their innovations, the latter to access foreign markets, while large emerging countries free-ride on rich countries' technology to serve their internal demand.

Suggested Citation

  • Emmanuelle Auriol & Sara Biancini & Rodrigo Paillacar, 2019. "Universal intellectual property rights: Too much of a good thing?," Post-Print hal-03475023, HAL.
    • Handle: RePEc:hal:journl:hal-03475023
    DOI: 10.1016/j.ijindorg.2019.01.003
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    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. Tommaso M. Valletti & Stefan Szymanski, 2006. "Parallel Trade, International Exhaustion And Intellectual Property Rights: A Welfare Analysis," Journal of Industrial Economics, Wiley Blackwell, vol. 54(4), pages 499-526, December.
    3. Di Comite, Francesco & Thisse, Jacques-François & Vandenbussche, Hylke, 2014. "Verti-zontal differentiation in export markets," Journal of International Economics, Elsevier, vol. 93(1), pages 50-66.
    4. 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.
    5. Brander, James A. & Spencer, Barbara J., 2015. "Intra-industry trade with Bertrand and Cournot oligopoly: The role of endogenous horizontal product differentiation," Research in Economics, Elsevier, vol. 69(2), pages 157-165.
    6. Heidi L. Williams, 2013. "Intellectual Property Rights and Innovation: Evidence from the Human Genome," Journal of Political Economy, University of Chicago Press, vol. 121(1), pages 1-27.
    7. Marc J. Melitz & Giancarlo I. P. Ottaviano, 2021. "Market Size, Trade, and Productivity," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 4, pages 87-108, World Scientific Publishing Co. Pte. Ltd..
    8. 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.
    9. Motta, Massimo, 1993. "Endogenous Quality Choice: Price vs. Quantity Competition," Journal of Industrial Economics, Wiley Blackwell, vol. 41(2), pages 113-131, June.
    10. Rosenkranz, Stephanie, 2003. "Simultaneous choice of process and product innovation when consumers have a preference for product variety," Journal of Economic Behavior & Organization, Elsevier, vol. 50(2), pages 183-201, February.
    11. 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.
    12. 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.
    13. Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2007. "What you export matters," Journal of Economic Growth, Springer, vol. 12(1), pages 1-25, March.
    14. Chen, Yongmin & Pan, Shiyuan & Zhang, Tianle, 2014. "(When) Do stronger patents increase continual innovation?," Journal of Economic Behavior & Organization, Elsevier, vol. 98(C), pages 115-124.
    15. Antonio Spilimbergo, 2009. "Democracy and Foreign Education," American Economic Review, American Economic Association, vol. 99(1), pages 528-543, March.
    16. Suzanne Scotchmer, 2004. "The Political Economy of Intellectual Property Treaties," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 20(2), pages 415-437, October.
    17. Redding, Stephen & Venables, Anthony J., 2004. "Economic geography and international inequality," Journal of International Economics, Elsevier, vol. 62(1), pages 53-82, January.
    18. Helpman, Elhanan, 1993. "Innovation, Imitation, and Intellectual Property Rights," Econometrica, Econometric Society, vol. 61(6), pages 1247-1280, November.
    19. 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.
    20. Thierry Mayer, 2008. "Market Potential and Development," SciencePo Working papers Main hal-01066164, HAL.
    21. 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, June.
    22. Braga, C.A.P. & Fink, C. & Sepulveda, C.P., 2000. "Intellectual Property Rights and Economic Development," World Bank - Discussion Papers 412, World Bank.
    23. Alireza Naghavi & Chiara Strozzi, 2011. "Intellectual Property Rights, Migration, and Diaspora," Working Papers 2011.60, Fondazione Eni Enrico Mattei.
    24. 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.
    25. Symeonidis, George, 2003. "Comparing Cournot and Bertrand equilibria in a differentiated duopoly with product R&D," International Journal of Industrial Organization, Elsevier, vol. 21(1), pages 39-55, January.
    26. Marc J. Melitz & Gianmarco I. P. Ottaviano, 2008. "Market Size, Trade, and Productivity (DOI:10.111/j.1467-937x.2007.00463.x)," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(3), pages 985-985.
    27. 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.
    28. 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.
    29. 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.
    30. Lee Branstetter & Kamal Saggi, 2011. "Intellectual Property Rights, Foreign Direct Investment and Industrial Development," Economic Journal, Royal Economic Society, vol. 121(555), pages 1161-1191, September.
    31. repec:hal:wpspec:info:hdl:2441/10146 is not listed on IDEAS
    32. Park, Walter G., 2008. "International patent protection: 1960-2005," Research Policy, Elsevier, vol. 37(4), pages 761-766, May.
    33. repec:hal:wpspec:info:hdl:2441/10192 is not listed on IDEAS
    34. Diego A. Comin & Bart Hobijn, 2009. "The CHAT Dataset," Harvard Business School Working Papers 10-035, Harvard Business School.
    35. Keith E. Maskus, 2000. "Intellectual Property Rights in the Global Economy," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 99, October.
    36. 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.
    37. Judith C. Chin & Gene M. Grossman, 1988. "Intellectual Property Rights and North-South Trade," NBER Working Papers 2769, National Bureau of Economic Research, Inc.
    38. 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.
    39. 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.
    40. Keith Head & Thierry Mayer, 2004. "Market Potential and the Location of Japanese Firms in the European Union," Sciences Po publications info:hdl:2441/10192, Sciences Po.
    41. 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.
    42. Panle Jia & Pinelopi K. Goldberg & Shubham Chaudhuri, 2006. "Estimating the Effects of Global Patent Protection in Pharmaceuticals: A Case Study of Quinolones in India," American Economic Review, American Economic Association, vol. 96(5), pages 1477-1514, December.
    43. James A. Brander & Barbara J. Spencer, 2015. "Endogenous Horizontal Product Differentiation under Bertrand and Cournot Competition: Revisiting the Bertrand Paradox," NBER Working Papers 20966, National Bureau of Economic Research, Inc.
    44. Bronwyn H. Hall, 2007. "Patents and patent policy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 23(4), pages 568-587, Winter.
    45. WAKASUGI Ryuhei & Hongyong ZHANG, 2012. "Effects of Ownership on Exports and FDI: Evidence from Chinese firms," Discussion papers 12058, Research Institute of Economy, Trade and Industry (RIETI).
    46. Lin, Ping & Saggi, Kamal, 2002. "Product differentiation, process R&D, and the nature of market competition," European Economic Review, Elsevier, vol. 46(1), pages 201-211, January.
    47. Carsten Fink & Keith E. Maskus, 2005. "Intellectual Property and Development : Lessons from Recent Economic Research," World Bank Publications - Books, The World Bank Group, number 7443, December.
    48. Lu, Jiangyong & Lu, Yi & Tao, Zhigang, 2010. "Exporting behavior of foreign affiliates: Theory and evidence," Journal of International Economics, Elsevier, vol. 81(2), pages 197-205, July.
    49. Langinier, Corinne & Moschini, GianCarlo, 2002. "Economics of Patents: An Overview, The," Staff General Research Papers Archive 2061, Iowa State University, Department of Economics.
    50. Sakthivel Lakshmana Prabu & Suriyaprakash Tnk (ed.), 2017. "Intellectual Property Rights," Books, IntechOpen, number 4515.
    51. 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.
    52. repec:hal:spmain:info:hdl:2441/10146 is not listed on IDEAS
    53. Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
    54. John Sutton, 1997. "One Smart Agent," RAND Journal of Economics, The RAND Corporation, vol. 28(4), pages 605-628, Winter.
    55. Auriol, Emmanuelle & Biancini, Sara & Paillacar, Rodrigo, 2015. "Intellectual Property Rights Protection and Trade," CEPR Discussion Papers 10602, C.E.P.R. Discussion Papers.
    56. Jeffrey Sachs, 2003. "The Global Innovation Divide," NBER Chapters, in: Innovation Policy and the Economy, Volume 3, pages 131-141, National Bureau of Economic Research, Inc.
    57. Yi Qian, 2007. "Do National Patent Laws Stimulate Domestic Innovation in a Global Patenting Environment? A Cross-Country Analysis of Pharmaceutical Patent Protection, 1978-2002," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 436-453, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Donges, Alexander & Selgert, Felix, 2019. "The Consequences of Radical Patent-Regime Change," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203662, Verein für Socialpolitik / German Economic Association.
    2. Auriol, Emmanuelle & Biancini, Sara & Paillacar, Rodrigo, 2023. "Intellectual property rights protection and trade: An empirical analysis," World Development, Elsevier, vol. 162(C).
    3. Xiaofeng Xu & Xiangyu Chen & Yi Xu & Tao Wang & Yifan Zhang, 2022. "Improving the Innovative Performance of Renewable Energy Enterprises in China: Effects of Subsidy Policy and Intellectual Property Legislation," Sustainability, MDPI, vol. 14(13), pages 1-24, July.
    4. Poyago-Theotoky, Joanna & Tsai, Yingyi, 2023. "Universally strong IPR protection and global welfare: A market-penetration perspective," Economic Modelling, Elsevier, vol. 124(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Auriol, Emmanuelle & Biancini, Sara & Paillacar, Rodrigo, 2015. "Intellectual Property Rights Protection and Trade," CEPR Discussion Papers 10602, C.E.P.R. Discussion Papers.
    2. Auriol, Emmanuelle & Biancini, Sara & Paillacar, Rodrigo, 2023. "Intellectual property rights protection and trade: An empirical analysis," World Development, Elsevier, vol. 162(C).
    3. Kamal Saggi, 2016. "Trade, Intellectual Property Rights, and the World Trade Organization," Vanderbilt University Department of Economics Working Papers 16-00014, Vanderbilt University Department of Economics.
    4. Biancini, Sara & Bombarda, Pamela, 2021. "Intellectual property rights, multinational firms and technology transfers," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 191-210.
    5. Chung, Kim-Sau & Lu, Chia-Hui, 2014. "Non-homothetic preferences and IPRs protection," Journal of Development Economics, Elsevier, vol. 109(C), pages 229-239.
    6. Hudson, John & Minea, Alexandru, 2013. "Innovation, Intellectual Property Rights, and Economic Development: A Unified Empirical Investigation," World Development, Elsevier, vol. 46(C), pages 66-78.
    7. GianCarlo Moschini, 2004. "Intellectual Property Rights and the World Trade Organization: Retrospect and Prospects," Chapters, in: Giovanni Anania & Mary E.. Bohman & Colin A. Carter & Alex F. McCalla (ed.), Agricultural Policy Reform and the WTO, chapter 19, pages 474-511, Edward Elgar Publishing.
    8. Lin, Jenny X. & Lincoln, William F., 2017. "Pirate's treasure," Journal of International Economics, Elsevier, vol. 109(C), pages 235-245.
    9. Anja, Breitwieser & Neil, Foster, 2012. "Intellectual property rights, innovation and technology transfer: a survey," MPRA Paper 36094, University Library of Munich, Germany.
    10. Arijit Mukherjee & Uday Bhanu Sinha, 2013. "Patent Protection, Southern Innovation and Welfare in a North–South Trade Model," Economica, London School of Economics and Political Science, vol. 80(318), pages 248-273, April.
    11. Auriol, Emmanuelle & Biancini, Sara, 2009. "Intellectual Property Rights Adoption in Developing Countries," TSE Working Papers 09-094, Toulouse School of Economics (TSE).
    12. Alireza Naghavi & Chiara Strozzi, 2011. "Intellectual Property Rights, Migration, and Diaspora," Working Papers 2011.60, Fondazione Eni Enrico Mattei.
    13. Kamal Saggi, 2013. "Market Power in the Global Economy: The Exhaustion and Protection of Intellectual Property," Economic Journal, Royal Economic Society, vol. 123(567), pages 131-161, March.
    14. Canals, Claudia & Şener, Fuat, 2014. "Offshoring and intellectual property rights reform," Journal of Development Economics, Elsevier, vol. 108(C), pages 17-31.
    15. Alireza Naghavi & Chiara Strozzi, "undated". "Intellectual Property Rights and Diaspora Knowledge Networks," Development Working Papers 380, Centro Studi Luca d'Agliano, University of Milano.
    16. Jenny X. Lin & William Lincoln, 2017. "Pirate’s Treasure," Working Papers 17-51, Center for Economic Studies, U.S. Census Bureau.
    17. Pamela J. Smith & Sebastian J. Anti, 2022. "How does TRIPs compliance affect the economic growth of developing countries? Application of the Synthetic Control method," The World Economy, Wiley Blackwell, vol. 45(12), pages 3873-3906, December.
    18. Naghavi, Alireza & Strozzi, Chiara, 2015. "Intellectual property rights, diasporas, and domestic innovation," Journal of International Economics, Elsevier, vol. 96(1), pages 150-161.
    19. Mueller-Langer, Frank, 2010. "An analysis of the ambiguous welfare effects of parallel trade freedom," MPRA Paper 35704, University Library of Munich, Germany.
    20. Awokuse, Titus O. & Yin, Hong, 2010. "Does Stronger Intellectual Property Rights Protection Induce More Bilateral Trade? Evidence from China's Imports," World Development, Elsevier, vol. 38(8), pages 1094-1104, August.

    More about this item

    Keywords

    Intellectual property rights; Innovation; Imitation; Duopoly; Developing countries;
    All these keywords.

    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:hal:journl:hal-03475023. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.