International intellectual property rights: Effects on growth, welfare and income inequality

What are the effects of strengthening developing countries’ protection for intellectual property rights on economic growth and income inequality in the global economy? To analyze this question, we develop a two-country R&D-based growth model with wealth heterogeneity. In this growth-theoretic fr...

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Bibliographic Details
Published in:Journal of macroeconomics 2011-06, Vol.33 (2), p.276-287
Main Authors: Chu, Angus C., Peng, Shin-Kun
Format: Article
Language:English
Subjects:
Developing countries
Economic growth
Economic growth Income inequality International intellectual property rights
Game theory
Growth models
Income inequality
Intellectual property
Intellectual property rights
International intellectual property rights
LDCs
Measurement
Research and development
Studies
World economy
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Summary:What are the effects of strengthening developing countries’ protection for intellectual property rights on economic growth and income inequality in the global economy? To analyze this question, we develop a two-country R&D-based growth model with wealth heterogeneity. In this growth-theoretic framework, we show that strengthening patent protection in either country increases economic growth and income inequality in both countries. Furthermore, we derive the Nash equilibrium level of patent breadth and find that it is sub-optimally low relative to globally optimal patent breadth due to the positive externality effects that are captured by a spillover parameter.
ISSN:0164-0704
1873-152X
DOI:10.1016/j.jmacro.2010.10.002