Intellectual Property Rights and International R&D Competition

Stefania Scandizzo

No 2001/081, IMF Working Papers from International Monetary Fund

Abstract: This paper examines a country's incentives for intellectual property rights (IPR) protection in a global trading environment. There is a time inconsistency problem intrinsic to IPR protection: ex ante strong protection is warranted to promote innovation, but once discovery takes place there is an incentive to lower protection. The sub optimal but time consistent policy involves an insufficient level of protection and, therefore, of innovation. In more technologically advanced economies reputational considerations may be sufficient to maintain strong protection. Otherwise a commitment mechanism, such as participation in the World Trade Organization, or, more controversially, some form of bilateral punishment, may be used.

Keywords: WP; IPR protection; consumer surplus; monopoly profits; Intellectual property rights; innovation; imitation; time inconsistency; commitment IPR Policy; home government; IPR regime; IPR policy; Income; Foreign corporations; Consumption; Competition; Global (search for similar items in EconPapers)
Pages: 24
Date: 2001-06-01
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