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Endogenous enforcement of intellectual property, North-South trade, and growth

  • Schäfer, Andreas
  • Schneider, Maik T.
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    While most countries have harmonized intellectual property rights (IPR) legislation, the dispute about the optimal level of IPR-enforcement remains. This paper develops an endogenous growth framework with two open economies satisfying the classical North-South assumptions to study (a) IPR-enforcement in a decentralized game and (b) the desired globally-harmonized IPR-enforcement of the two regions. The results are compared to the constrained-efficient enforcement level. Our main insights are: The regions' desired harmonized enforcement levels are higher than their equilibrium choices, however, the gap between the two shrinks with relative market size. While growth rates substiantially increase when IPR-enforcement is harmonized at the North's desired level, our numerical simulation suggests that the South may also benefit in terms of long-run welfare.

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    File URL: http://econstor.eu/bitstream/10419/48853/1/666351384.pdf
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    Paper provided by University of Leipzig, Faculty of Economics and Management Science in its series Working Papers with number 96.

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    Date of creation: 2011
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    Handle: RePEc:zbw:leiwps:96
    Contact details of provider: Postal: Marschnerstraße 31, 04109 Leipzig
    Web page: http://www.wifa.uni-leipzig.de/en/dekanat.html

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    1. Belke, Ansgar & Schnabl, Gunther, 2010. "Finanzkrise, globale Liquidität und makroökonomischer Exit," Working Papers 92, University of Leipzig, Faculty of Economics and Management Science.
    2. Martin L. Weitzman, 1995. "Recombinant Growth," Harvard Institute of Economic Research Working Papers 1722, Harvard - Institute of Economic Research.
    3. Eicher, Theo & García-Peñalosa, Cecilia, 2008. "Endogenous strength of intellectual property rights: Implications for economic development and growth," European Economic Review, Elsevier, vol. 52(2), pages 237-258, February.
    4. Hans Gersbach, 2004. "Competition of Politicians for Incentive Contracts and Elections," Public Choice, Springer, vol. 121(1), pages 157-177, October.
    5. McCalman, Phillip, 2001. "Reaping what you sow: an empirical analysis of international patent harmonization," Journal of International Economics, Elsevier, vol. 55(1), pages 161-186, October.
    6. Dinopoulos, Elias & Segerstrom, Paul, 2006. "North-South Trade and Economic Growth," CEPR Discussion Papers 5887, C.E.P.R. Discussion Papers.
    7. Phillip McCalman, 2001. "National patents, innovation and international agreements," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 11(1), pages 1-14.
    8. Futagami, Koichi & Iwaisako, Tatsuro, 2007. "Dynamic analysis of patent policy in an endogenous growth model," Journal of Economic Theory, Elsevier, vol. 132(1), pages 306-334, January.
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