Theory and Empirics of Stage-Dependent Intellectual Property Rights

Angus Chu, Guido Cozzi and Silvia Galli ()

No 1306, Economics Working Paper Series from University of St. Gallen, School of Economics and Political Science

Abstract: Inspired by the Chinese experience, we develop a Schumpeterian growth model of distance to frontier in which economic growth in the developing country is driven by domestic innovation as well as imitation and transfer of foreign technologies through foreign direct investment. We show that optimal intellectual property rights (IPR) protection is stagedependent. At an early stage of development, the country implements weak IPR protection to facilitate imitation. At a later stage of development, the country implements strong IPR protection to encourage domestic innovation. Therefore, the growth-maximizing and welfare-maximizing levels of patent strength increase as the country evolves towards the world technology frontier, and this dynamic pattern is consistent with the actual evolution of patent strength in China. Furthermore, we use a dynamic panel regression model to provide empirical evidence that supports the key implication of our theoretical model.

Keywords: Economic growth; stage-dependent intellectual property rights (search for similar items in EconPapers)
JEL-codes: O31 O34 O40 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2013-03
New Economics Papers: this item is included in nep-ino, nep-ipr, nep-pr~ and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://ux-tauri.unisg.ch/RePEc/usg/econwp/EWP-1306.pdf (application/pdf)

Related works:
Journal Article: Stage-dependent intellectual property rights (2014)
Working Paper: Innovating like China: a theory of stage-dependent intellectual property rights (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:usg:econwp:2013:06

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