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Patent protection, innovation, and technology transfer in a Schumpeterian economy

Chien-Yu Huang, Yibai Yang () and Zhijie Zheng

MPRA Paper from University Library of Munich, Germany

Abstract: This paper analyzes the effects of intellectual property rights (IPR) protection on innovation and technology transfer in a North-South quality-ladder model with innovative Northern R&D and adaptive Southern R&D. The degree of IPR protection in two countries differs in terms of patent breadth, which determines the markups of Northern firms and their Southern affiliates, respectively. In this model, stronger IPR protection in the South leads to a permanent decrease in the North-South wage gap, a temporary increase in the Northern innovation rate, and a permanent increase in technology transfer. By contrast, stronger IPR protection in the North leads to a permanent increase in the North-South wage gap, ambiguous effects on the Northern innovation rate, and a permanent decrease in technology transfer. Finally, we perform a quantitative analysis by calibrating the model to the US-China data, and the numerical results support these policy implications.

Keywords: Intellectual property rights protection; Schumpeterian innovation; multinational firms; technology transfer (search for similar items in EconPapers)
JEL-codes: F12 F23 F43 O31 O34 (search for similar items in EconPapers)
Date: 2019-03
New Economics Papers: this item is included in nep-com, nep-cse, nep-ino, nep-ipr, nep-knm and nep-sbm
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