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North-South Trade and Directed Technical Change

Alessandra Bonfiglioli () and Gino Gancia ()

UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC)

Abstract: In a world where poor countries provide weak protection for intellectual property rights (IPRs), 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 IPRs are weakly protected can slow down the world growth rate. An important implication of these results is that protection of intellectual property is most beneficial in open countries. This prediction, which is novel in the literature, is consistent with evidence from a panel of 53 countries observed in the years 1965-1990. The paper also provides empirical support for the mechanism linking North-South trade to the direction of technical change: an increase in import penetration from low-wage, low-IPRs, countries is followed by a sharp fall in R&D investment in a panel of US manufacturing sectors.

Keywords: Economic Growth; North-South Trade; Directed Technical Change; Intellectual Property Rights; Cross-Country Income Differences. (search for similar items in EconPapers)
JEL-codes: F14 F43 O33 O34 O41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-int
Date: 2007-09-15, Revised 2008-06-27
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Related works:
Journal Article: North-South trade and directed technical change (2008) Downloads
Working Paper: North-south trade and directed technical change (2006) Downloads
Working Paper: North-South Trade and Directed Technical Change (2003) Downloads
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