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International Intellectual Property Rights: Effects on Growth, Welfare and Income Inequality

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Abstract

What are the effects of increasing developing countries’ intellectual property rights protection on growth, welfare and income inequality in the global economy? To analyze this question, we develop a two-country R&D-growth model with wealth heterogeneity. We find that the North experiences higher growth and welfare at the expense of higher income inequality while the South experiences higher growth at the expense of lower welfare and higher income inequality. As for global welfare, there exists a critical degree for the domestic importance of foreign goods below (above) which global welfare decreases (increases). In light of these findings, we discuss policy implications on China’s accession to the WTO in 2001. Furthermore, we analyze the effects of China’s rising innovative capability on domestic and foreign income inequality.

Suggested Citation

  • Angus C. Chu & Shin-Kun Peng, 2009. "International Intellectual Property Rights: Effects on Growth, Welfare and Income Inequality," IEAS Working Paper : academic research 09-A006, Institute of Economics, Academia Sinica, Taipei, Taiwan.
    • Handle: RePEc:sin:wpaper:09-a006
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    Cited by:

    1. Chu, Angus C. & Leung, Charles K.Y. & Tang, Edward, 2012. "Intellectual property rights, technical progress and the volatility of economic growth," Journal of Macroeconomics, Elsevier, vol. 34(3), pages 749-756.
    2. Chen, Hung-Ju, 2019. "Innovation and FDI: Does the Target of Intellectual Property Rights Matter?," MPRA Paper 94692, University Library of Munich, Germany.
    3. Yu, Po-yang & Lai, Ching-chong, 2020. "Optimal Privatization and Economic Growth in a Schumpeterian Economy," Journal of Macroeconomics, Elsevier, vol. 64(C).
    4. Neves, Pedro Cunha & Afonso, Oscar & Silva, Diana & Sochirca, Elena, 2021. "The link between intellectual property rights, innovation, and growth: A meta-analysis," Economic Modelling, Elsevier, vol. 97(C), pages 196-209.
    5. Chen, Hung-Ju, 2021. "Innovation and FDI: Does the target of intellectual property rights protection matter?," Journal of International Money and Finance, Elsevier, vol. 118(C).
    6. Sefa Awaworyi Churchill & Hoang M. Luong & Mehmet Ugur, 2022. "Does intellectual property protection deliver economic benefits? A multi‐outcome meta‐regression analysis of the evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 36(5), pages 1477-1509, December.
    7. Madsen, Jakob & Minniti, Antonio & Venturini, Francesco, 2024. "Declining research productivity and income inequality: A centenary perspective," Journal of Economic Dynamics and Control, Elsevier, vol. 167(C).
    8. Angus C. Chu, 2009. "Macroeconomic Effects of Intellectual Property Rights: A Survey," IEAS Working Paper : academic research 09-A007, Institute of Economics, Academia Sinica, Taipei, Taiwan.
    9. Sorek, Gilad, 2011. "Patents and quality growth in OLG economy," Journal of Macroeconomics, Elsevier, vol. 33(4), pages 690-699.
    10. Christian Kiedaisch, 2021. "Growth and welfare effects of intellectual property rights when consumers differ in income," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(4), pages 1121-1170, November.
    11. Zheng, Zhijie & Huang, Chien-Yu & Yang, Yibai, 2020. "Patent protection, innovation, and technology transfer in a Schumpeterian economy," European Economic Review, Elsevier, vol. 129(C).
    12. Eric W. Bond & Ben Zissimos, 2017. "Patent Breadth In An International Setting," Economic Inquiry, Western Economic Association International, vol. 55(3), pages 1538-1555, July.
    13. Zhang, Jingjing & Leoncini, Riccardo & Tsai, Yingyi, 2018. "Intellectual property rights protection, labour mobility and wage inequality," Economic Modelling, Elsevier, vol. 70(C), pages 239-244.
    14. Angus C. Chu, 2024. "Macroeconomic effects of intellectual property rights: an updated survey," Chapters, in: Walter G. Park (ed.), Handbook of Innovation and Intellectual Property Rights, chapter 2, pages 13-26, Edward Elgar Publishing.
    15. Yuki Saito, 2018. "On the trade, growth, and welfare effects of intellectual property rights protection," Southern Economic Journal, John Wiley & Sons, vol. 85(1), pages 235-254, July.
    16. Petar Stankov, 2017. "Economic Freedom and Welfare Before and After the Crisis," Springer Books, Springer, number 978-3-319-62497-6, December.
    17. Ronald B. Davies & Yutao Han & Kate Hynes & Yong Wang, 2023. "Competition in taxes and intellectual property right," Review of International Economics, Wiley Blackwell, vol. 31(3), pages 931-955, August.

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    Keywords

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    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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