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North-south trade and directed technical change

In a world where poor countries provide weak protection for intellectual property rights, market integration shifts technical change in favor of rich nations. Through this channel, free trade may amplify international income differences. At the same time, integration with countries where intellectual property rights are weakly protected can slow down the world growth rate. A crucial implication of these results is that protection of intellectual property is most beneficial in open countries. This prediction, which is novel in the literature, finds support in the data on a panel of 53 countries observed in the years 1965-1990.

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Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 834.

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Date of creation: May 2003
Date of revision: May 2006
Handle: RePEc:upf:upfgen:834
Contact details of provider: Web page: http://www.econ.upf.edu/

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