Location, taxation and governments: An exchange theory of intellectual property

Sinclair Davidson, Vijay Mohan and Jason Potts

Journal of Economic Behavior & Organization, 2020, vol. 169, issue C, 266-283

Abstract: The standard economic model of intellectual property is an efficient property rights solution to a market failure problem of investment in a non-rival and non-excludable good. We propose an exchange theory of intellectual property based on a contracting approach in the context of market-making and enforcement of economic rights in exchange for monopoly taxation rights. We use a Hotelling (1929) type spatial model to show the relationship between location and pricing decisions of innovating firms under differing intellectual property, institutional quality, and taxation regimes.

Keywords: Intellectual property; Hotelling model; Tax competition; Tax harmonization; Strategic trade policy (search for similar items in EconPapers)
JEL-codes: D4 F1 H2 H7 K3 L1 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:169:y:2020:i:c:p:266-283

DOI: 10.1016/j.jebo.2019.11.018

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