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

Huang, Chien-Yu and Yang, Yibai and Zheng, Zhijie (2019): Patent protection, innovation, and technology transfer in a Schumpeterian economy.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Intellectual property rights protection, Schumpeterian innovation, multinational firms, technology transfer
• Subjects: F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies ; Fragmentation; F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms ; International Business; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O34 - Intellectual Property and Intellectual Capital

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