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

Abstract

What are the effects of strengthening developing countries' protection for intellectual property rights on economic growth, social welfare and income inequality in the global economy? To analyze this question, we develop a two-country R&D-based growth model with wealth heterogeneity. We find that the North experiences higher growth and welfare at the expense of higher income inequality while the South experiences higher growth at the expense of lower welfare and higher income inequality. As for global welfare, there exists a critical degree of crosscountry spillovers below (above) which global welfare decreases (increases). In light of these findings, we discuss policy implications on China's accession to the World Trade Organization in 2001.

Growth and Welfare Effects of Intellectual Property Rights When Consumers Differ in Income

“…He finds that preventing arbitrage across countries reduces innovation and harms the rich North while it might benefit the poor South. Chu and Peng (2011) extend the model of Chu (2010) to a two-country context. Further references can be found in a recent literature survey by Saggi (forthcoming).…”

Patent Breadth in an International Setting

“…5 The discussion in this section draws on Hatter (1994-5) and Bonitatibus (2001-2). be applied to each claim in the patent.…”

“…They characterize the welfare maximizing patent breadth, and show that it is less than the breath that maximizes the rate of innovation. Chu and Peng (2010) analyze the optimal patent breadth in a two country quality ladders model where patent breadth serves as a shift parameter on the pro…ts of the innovator engaged in Bertrand competition with potential imitators. They …nd that in general the country with less innovative ability will choose narrower patents.…”

Invention software support by integrating function and mathematical modeling

“…It is also a tool for economists to approach the innovation market with quantitative analyses (we suggest the term innovometrics). For example, (Chu & Peng, 2011) show a positive correlation between the share of IP in a country's gross domestic product and gross domestic product per capita itself.…”