Intellectual Property, Tariffs, and International Trade Dynamics

Abstract

The emergence of global value chains not only leads to a magnification of trade in intermediate inputs but also to an extensive technology diffusion among the different production units involved in arms-length relationships. In this context, the lack of enforcement of intellectual property rights has recently become a highly controversial subject of debate in the context of the China-U.S. trade negotiations. This paper analyzes the strategic interaction of tariff policies and the enforcement of intellectual property rights within a quantitative general equilibrium framework. Results indicate that, in principle, tariffs could be an effective deterrent for weak protections for intellectual property. Moreover, weakening enforcement may be a strong deterrent for raising tariffs. These results combined indicate that there is scope for international cooperation on these fronts.

International Technology Licensing, Intellectual Property Rights, and Tax Havens

“…As the second column of table 1 shows, trade has a positive and statistically significant effect. Indeed, a significant amount of technology transfers happen at arms-length relationships between a firm and its suppliers (Mandelman and Waddle, 2019). Distance and common language still have the expected signs and are statistically significant.…”

“…China, however, still follows the policy. Holmes, McGrattan, and Prescott (2015) show, though the lens of a quantitative general equilibrium model, that this policy has had an important impact on global innovation and welfare (see also McGrattan et al, 2015). 2006; Mandelman and Waddle, 2019), which can be measured using data on cross-country payments for the use of foreign intellectual property (IP) from the Organization for Economic Co-operation and Development (OECD). These data are available for a large number of countries and time-period, include both intra-firm and third-party payments for the use of foreign IP, and are recorded in the balance of payments of a country as a trade in services.…”

Why is the Hong Kong Housing Market Unaffordable? Some Stylized Facts and Estimations

“…5 The literature related to this recent trade war is growing. Among others, see Abiad et al (2018), Amiti et al (2019), Guo et al (2018), Mandelman and Waddle (2019), Tham et al (2019). 6 Notice that the United States follows (approximately) a version of the Taylor rule, which is an interest rate rule (Koenig et al, 2012).…”

Technological and Economic Decoupling in the Cyber Era

“…In our model, exporters can switch to become importers (and vice versa), there is technological leapfrogging, and there are incentives for decoupling. These features differentiate the paper fromMandelman and Waddle (2020), who also study the interaction between technology diffusion and optimal trade policy but keep fixed the roles of importer and exporter.©International Monetary Fund. Not for Redistribution…”