Asymmetric Intellectual Property Rights Protection and North-South Welfare

Earl L. Grinols and Hwan Lin

MPRA Paper from University Library of Munich, Germany

Abstract: We construct a model of dynamic endogenous product innovation and international trade, using it to calculate the welfare effects of lower intellectual property rights (IPR) protection in the non-innovating South than in the innovating North. We find that it is generally in the North’s interest to protect its innovating sector by an import embargo on IPR-offending goods from abroad. We explain the paradoxical outcome where the North gains from weaker IPR enforcement in the South through a decomposition of the dynamic welfare formula. Key features include the ability of lower Southern IPR protection to spur innovation of Northern goods and to make available greater resources for Northern production of current consumption goods. Maintaining Northern IPR standards can be in the South’s interests even though the South would favor lower uniform levels of IPR protection.

Keywords: Intellectual Property Rights; Innovation; Imitation; North; South; Welfare (search for similar items in EconPapers)
JEL-codes: F10 (search for similar items in EconPapers)
Date: 1997-09
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Citations: View citations in EconPapers (6)

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