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Intellectual Property Rights Adoption in Developing Countries

  • Auriol, Emmanuelle
  • Biancini, Sara

This paper studies the incentives that developing countries have to enforce intellectual properties rights (IPR). On the one hand, free-riding on rich countries technology reduces the investment cost in R&D. On the other hand, it yields apotential indirect cost: a firm that violates IPR cannot legally export in a country that enforces them. IPR act like a barrier to entry of the advanced economy markets. Moreover free-riders cannot prevent other to copy their own innovation. The analysis, which distinguishes between large and small developing countries, predicts that small ones should be willing to respect IPR if they want to export and access advanced economies markets, while large emerging countries, such as China and India, will be more reluctant to do so as their huge domestic markets develop. Global welfare is higher under the full protection regime if the developing country does not innovate. It is higher under a partial regime if both countries have access to similar R&D technology and the developing country market is large enough.

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Paper provided by Toulouse School of Economics (TSE) in its series TSE Working Papers with number 09-094.

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Date of creation: Oct 2009
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Handle: RePEc:tse:wpaper:22270
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  1. Lai, Edwin L. -C. & Qiu, Larry D., 2003. "The North's intellectual property rights standard for the South?," Journal of International Economics, Elsevier, vol. 59(1), pages 183-209, January.
  2. Li, Changying & Maskus, Keith E., 2006. "The impact of parallel imports on investments in cost-reducing research and development," Journal of International Economics, Elsevier, vol. 68(2), pages 443-455, March.
  3. Gilles Saint-Paul, 2002. "Growth Effects of non Proprietary Innovation," CESifo Working Paper Series 726, CESifo Group Munich.
  4. Malueg, David A. & Schwartz, Marius, 1994. "Parallel imports, demand dispersion, and international price discrimination," Journal of International Economics, Elsevier, vol. 37(3-4), pages 167-195, November.
  5. Gene M. Grossman & Edwin C.-L. Lai, 2006. "Parallel Imports and Price Controls," NBER Working Papers 12423, National Bureau of Economic Research, Inc.
  6. Gene M. Grossman & Edwin L.-C. Lai, 2002. "International Protection of Intellectual Property," CESifo Working Paper Series 790, CESifo Group Munich.
  7. Tommaso Valletti & Stefan Szymanski, 2006. "Parallel Trade, International Exhaustion and Intellectual Property Rights: A Welfare Analysis," CEIS Research Paper 75, Tor Vergata University, CEIS.
  8. Gene M. Grossman & Edwin L.-C. Lai, 2008. "Parallel imports and price controls," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 378-402.
  9. Aghion, Philippe, et al, 2001. "Competition, Imitation and Growth with Step-by-Step Innovation," Review of Economic Studies, Wiley Blackwell, vol. 68(3), pages 467-92, July.
  10. Harris, Christopher & Howitt, Peter & Vickers, John & Aghion, Philippe, 2001. "Competition, Imitation and Growth with Step-by-Step Innovation," Scholarly Articles 12375013, Harvard University Department of Economics.
  11. Valletti, Tommaso M., 2006. "Differential pricing, parallel trade, and the incentive to invest," Journal of International Economics, Elsevier, vol. 70(1), pages 314-324, September.
  12. Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
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