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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. Alan Krueger & Mikael Lindahl, 2000. "Education for Growth: Why and For Whom?," Working Papers 808, Princeton University, Department of Economics, Industrial Relations Section..
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  4. 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.
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  8. 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.
  9. Chen, Hung-ju, 2005. "Educational systems, growth and income distribution: a quantitative study," Journal of Development Economics, Elsevier, vol. 76(2), pages 325-353, April.
  10. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
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  12. Amy Jocelyn Glass, 2004. "Outsourcing under Imperfect Protection of Intellectual Property," Review of International Economics, Wiley Blackwell, vol. 12(5), pages 867-884, November.
  13. Gene M. Grossman & Elhanan Helpman, 1989. "Endogenous Product Cycles," NBER Working Papers 2913, National Bureau of Economic Research, Inc.
  14. Edwin Lai & Raymond Riezman & Ping Wang, 2009. "Outsourcing of innovation," Economic Theory, Springer, vol. 38(3), pages 485-515, March.
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  20. 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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  22. 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.
  23. Glass, Amy Jocelyn & Wu, Xiaodong, 2007. "Intellectual property rights and quality improvement," Journal of Development Economics, Elsevier, vol. 82(2), pages 393-415, March.
  24. 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.
  25. 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.
  26. Segerstrom, Paul S, 1998. "Endogenous Growth without Scale Effects," American Economic Review, American Economic Association, vol. 88(5), pages 1290-1310, December.
  27. 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.
  28. 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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