North-South Trade and Directed Technical Change

Gino Gancia and Alessandra Bonfiglioli ()

No 321, Working Papers from Barcelona School of Economics

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; intellectual property rights; directed technical change; Cross-Country Income Differences. (search for similar items in EconPapers)
JEL-codes: F14 F43 O33 O34 O41 (search for similar items in EconPapers)
Date: 2015-09
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: North-South trade and directed technical change (2008)
Working Paper: North-South Trade and Directed Technical Change (2008)
Working Paper: North-south trade and directed technical change (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:321

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