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A Theory of North-South Trade and Globalization

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  • Paul Segerstrom
  • Elias Dinopoulos

Abstract

This paper develops a dynamic general equilibrium model of North-South trade. Northern firms devote resources to innovative R&D to discover higher quality products and Southern firms devote resources to imitative R&D to copy state-of-the-art quality products. Both innovation and imitation rates are endogenously determined as well as the degree of wage inequality between Northern and Southern workers. The steady-state effects of globalization and stronger protection of intellectual property are analyzed

Suggested Citation

  • Paul Segerstrom & Elias Dinopoulos, 2004. "A Theory of North-South Trade and Globalization," 2004 Meeting Papers 30, Society for Economic Dynamics.
  • Handle: RePEc:red:sed004:30
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    References listed on IDEAS

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    10. Mansfield, Edwin & Schwartz, Mark & Wagner, Samuel, 1981. "Imitation Costs and Patents: An Empirical Study," Economic Journal, Royal Economic Society, vol. 91(364), pages 907-918, December.
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    Citations

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    Cited by:

    1. Testsugen Haruyama & Ken-ichi Hashimoto, 2007. "Technological Leaders and Followers in a World Economy," DEGIT Conference Papers c012_010, DEGIT, Dynamics, Economic Growth, and International Trade.
    2. Ryo Horii & Tatsuro Iwaisako, 2007. "Economic Growth with Imperfect Protection of Intellectual Property Rights," Journal of Economics, Springer, vol. 90(1), pages 45-85, January.
    3. Gilles Koléda, 2005. "Northern and Southern Patent Novelty Requirements Harmonization, Growth and Trade," DEGIT Conference Papers c010_025, DEGIT, Dynamics, Economic Growth, and International Trade.
    4. Gancia, Gino & Bonfiglioli, Alessandra, 2008. "North-South trade and directed technical change," Journal of International Economics, Elsevier, vol. 76(2), pages 276-295, December.
    5. Wolf-Heimo Grieben, 2006. "Globalization with Labor Market Frictions and Non-Scale Growth," DEGIT Conference Papers c011_053, DEGIT, Dynamics, Economic Growth, and International Trade.
    6. Wolfgang Keller & Carol H. Shiue, 2007. "Market Integration and Economic Development: A Long-run Comparison," Review of Development Economics, Wiley Blackwell, vol. 11(1), pages 107-123, February.
    7. Gancia, Gino & Zilibotti, Fabrizio, 2005. "Horizontal Innovation in the Theory of Growth and Development," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 3, pages 111-170 Elsevier.
    8. Haibin Wu, 2010. "Distance to frontier, intellectual property rights, and economic growth," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 19(2), pages 165-183.
    9. Amy Jocelyn Glass, 2004. "Outsourcing under Imperfect Protection of Intellectual Property," Review of International Economics, Wiley Blackwell, vol. 12(5), pages 867-884, November.
    10. Hitoshi Tanaka & Tatsuro Iwaisako & Koichi Futagami, 2006. "Dynamic Analysis of Innovation and Licensing: The Effects of Intellectual Property Rights Protection," Discussion Papers in Economics and Business 06-06, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
    11. Wolf-Heimo GRIEBEN, 2004. "Globalization, Labor Market Rigidities and Multiple Equilibria," DEGIT Conference Papers c009_020, DEGIT, Dynamics, Economic Growth, and International Trade.
    12. Patrick Artus, 2006. "Intégration commerciale avec des pays émergents ayant des ressources importantes en main-d'œuvre qualifiée. Quels effets pour les pays européens ?," Revue économique, Presses de Sciences-Po, vol. 57(4), pages 673-704.
    13. Segerstrom, Paul, 2003. "Naomi Klein and the Anti-Globalization Movement," CEPR Discussion Papers 4141, C.E.P.R. Discussion Papers.
    14. Hitoshi Tanaka, 2006. "Dynamic Analysis of Imitation and Technology Gap," Journal of Economics, Springer, vol. 87(3), pages 209-240, April.
    15. Cusolito, Ana, 2009. "Competition, imitation, and technical change : quality vs. variety," Policy Research Working Paper Series 4997, The World Bank.
    16. Raouf Boucekkine & Blanca Martinez & Cagri Saglam, 2010. "Capital Maintenance As A Key Development Tool," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(5), pages 547-567, November.
    17. Óscar Afonso & Álvaro Aguiar, 2005. "Price-Channel Effects of North-South Trade on the Direction of Technological Knowledge and Wage Inequality," FEP Working Papers 170, Universidade do Porto, Faculdade de Economia do Porto.
    18. Gilles Koléda, 2007. "A Two-countries Two-R&D-sectors Model of Growth and Trade," DEGIT Conference Papers c012_009, DEGIT, Dynamics, Economic Growth, and International Trade.

    More about this item

    Keywords

    Economic Growth; North-South Trade; Globalization;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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