Intellectual Property Rights and North-South Trade

Judith C. Chin and Gene Grossman

No 2769, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the incentive that a government in the South has to protect the intellectual property rights of Northern firms, and the consequences of the decision taken by the South for welfare in the North and for efficiency of the world equilibrium. We conduct our analysis in the context of a competition between a single Northern producer and a single Southern producer selling some good to an integrated world market. In this competition, only the Northern firm has the ability to conduct R&D in order to lower its production costs, but the Southern firm can imitate costlessly if patent protection for process innovations is not enforced by the government of the South. We find that the interests of the North and the South generally conflict in the matter of protection of intellectual property, with the South benefiting from the ability to pirate technology and the North harmed by such actions. A strong system of intellectual property rights may or may not enhance world efficiency.

Date: 1988-11
Note: ITI IFM
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Citations: View citations in EconPapers (25)

Published as The Political Economy of International Trade, edited by Ronald Jones and Anne O. Krueger, pp. 90-107. Oxford: Basil Blackwell, 1990.

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Working Paper: INTELLECTUAL PROPERTY RIGTHS AND NORTH-SOUTH TRADE (1988)
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