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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. 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.
    3. repec:eee:ecmode:v:70:y:2018:i:c:p:239-244 is not listed on IDEAS
    4. Sorek, Gilad, 2011. "Patents and quality growth in OLG economy," Journal of Macroeconomics, Elsevier, vol. 33(4), pages 690-699.
    5. 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.

    More about this item

    Keywords

    endogenous growth; heterogeneity; income inequality; patent policy; TRIPS;

    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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