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Intellectual Property Rights and Skills Accumulation: A North-South Model of FDI and Outsourcing

  • Chen, Hung-Ju

This study investigates the effects of stronger intellectual property rights (IPR) protection in the South on innovation, skills choice, wage inequality and patterns of production based on a North-South general-equilibrium model with foreign direct investment (FDI) and international outsourcing. We find that stronger IPR protection in the South raises the extent of outsourcing and reduces the extent of FDI. This raises the proportion of Southerners being unskilled and mitigates wage inequality in the South. In the North, stronger Southern IPR protection raises the proportion of Northerners being skilled and wage inequality. The effects of international specialization, R&D cost and Northern population are also examined.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 45035.

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Date of creation: 14 Mar 2013
Date of revision:
Handle: RePEc:pra:mprapa:45035
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  1. Gene M. Grossman & Elhanan Helpman, 2003. "Outsourcing Versus FDI in Industry Equilibrium," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 317-327, 04/05.
  2. Chen, Hung-Ju, 2006. "A Note On The Impact Of Voucher Programs When There Are Nonlinear Peer Group Effects," Macroeconomic Dynamics, Cambridge University Press, vol. 10(05), pages 685-698, November.
  3. Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 818-34, August.
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  6. Edwin Lai & Raymond Riezman & Ping Wang, 2009. "Outsourcing of innovation," Economic Theory, Springer, vol. 38(3), pages 485-515, March.
  7. Antras, Pol & Helpman, Elhanan, 2004. "Global Sourcing," Scholarly Articles 3196327, Harvard University Department of Economics.
  8. Eiichi Tomiura, 2005. "Foreign Outsourcing, Exporting, and FDI: A Productivity Comparison at the Firm Level," Discussion Paper Series 168, Research Institute for Economics & Business Administration, Kobe University.
  9. Segerstrom, Paul S & Anant, T C A & Dinopoulos, Elias, 1990. "A Schumpeterian Model of the Product Life Cycle," American Economic Review, American Economic Association, vol. 80(5), pages 1077-91, December.
  10. Hung-ju Chen, 2003. "Educational Systems, Growth and Income Distribution: A Quantitative Study," Computing in Economics and Finance 2003 13, Society for Computational Economics.
  11. Brian Aitken & Ann Harrison & Robert E. Lipsey, 1995. "Wages and Foreign Ownership: A Comparative Study of Mexico, Venezuela and the United States," NBER Working Papers 5102, National Bureau of Economic Research, Inc.
  12. Parello, Carmelo Pierpaolo, 2008. "A north-south model of intellectual property rights protection and skill accumulation," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 253-281, February.
  13. Segerstrom, Paul S, 1998. "Endogenous Growth without Scale Effects," American Economic Review, American Economic Association, vol. 88(5), pages 1290-1310, December.
  14. Grossman, G.M. & Helpman, E., 1989. "Quality Ladders And Product Cycles," Papers 39-89, Tel Aviv.
  15. repec:hrv:faseco:4784029 is not listed on IDEAS
  16. Glass, Amy Jocelyn & Saggi, Kamal, 2001. "Innovation and wage effects of international outsourcing," European Economic Review, Elsevier, vol. 45(1), pages 67-86, January.
  17. Robert C. Feenstra & Gordon H. Hanson, 1996. "Globalization, Outsourcing, and Wage Inequality," NBER Working Papers 5424, National Bureau of Economic Research, Inc.
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  19. David Card & Alan B. Krueger, 1996. "School Resources and Student Outcomes: An Overview of the Literature and New Evidence from North and South Carolina," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 31-50, Fall.
  20. Paul Segerstrom & Elias Dinopoulos, 1999. "A Schumpeterian Model of Protection and Relative Wages," American Economic Review, American Economic Association, vol. 89(3), pages 450-472, June.
  21. Alan B. Krueger & Mikael Lindahl, 2000. "Education for Growth: Why and For Whom?," NBER Working Papers 7591, National Bureau of Economic Research, Inc.
  22. Glass, Amy Jocelyn & Saggi, Kamal, 2002. "Intellectual property rights and foreign direct investment," Journal of International Economics, Elsevier, vol. 56(2), pages 387-410, March.
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  24. Yang, Guifang & Maskus, Keith E., 2001. "Intellectual property rights, licensing, and innovation in an endogenous product-cycle model," Journal of International Economics, Elsevier, vol. 53(1), pages 169-187, February.
  25. Amy Jocelyn Glass, 2004. "Outsourcing under Imperfect Protection of Intellectual Property," Review of International Economics, Wiley Blackwell, vol. 12(5), pages 867-884, November.
  26. Sherif Khalifa & Evelina Mengova, 2010. "Offshoring And Wage Inequality In Developing Countries," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 35(3), pages 1-42, September.
  27. Lai, Edwin L. C., 1995. "The product cycle and the world distribution of income A reformulation," Journal of International Economics, Elsevier, vol. 39(3-4), pages 369-382, November.
  28. Lai, Edwin L. -C., 1998. "International intellectual property rights protection and the rate of product innovation," Journal of Development Economics, Elsevier, vol. 55(1), pages 133-153, February.
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