Hostname: page-component-76fb5796d-dfsvx Total loading time: 0 Render date: 2024-04-26T21:14:15.703Z Has data issue: false hasContentIssue false
  • English
  • Français

INNOVATION AND IMITATION: EFFECTS OF INTELLECTUAL PROPERTY RIGHTS IN A PRODUCT-CYCLE MODEL OF SKILLS ACCUMULATION

Published online by Cambridge University Press:  11 July 2017

Hung-Ju Chen
Hung-Ju Chen*
Affiliation:
National Taiwan University
*
Address correspondence to: Hung-Ju Chen, Department of Economics, National Taiwan University, No. 1, Sec. 4, Roosevelt Road, Taipei 10617, Taiwan; Tel: 886-2-33668416; Fax: 886-2-33668454; e-mail: hjc@ntu.edu.tw.
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper analyzes the effects of stronger intellectual property rights (IPR) protection in the South on innovation, imitation, the pattern of production, and wage inequality based on a North–South product-cycle model with foreign direct investment (FDI) and skills accumulation. This quality-ladder model features innovative R&D in the North and imitative R&D in the South. Two types of innovations are considered: innovation targeting all products and innovation targeting only imitated products. We find that for both types of innovations, strengthening IPR protection reduces the innovation rate and raises the imitation rate. There is also an increase in the proportion of Northern unskilled labor and a decrease in Northern wage inequality. As for the pattern of production, strengthening IPR protection may reduce the extent of FDI.

Keywords

ImitationIPRR&DSkillsWage Inequality
Type
Articles
Information
Macroeconomic Dynamics , Volume 22 , Issue 6 , September 2018 , pp. 1475 - 1509
Copyright
Copyright © Cambridge University Press 2017 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

The author would like to thank the associate editor, two anonymous referees and Ming-Chia Li for helpful comments and suggestions. The financial supports provided by the Ministry of Science and Technology of Taiwan (grant number: MOST-104-2410-H-002-005-MY3) and the Program for Globalization Studies at the Institute for Advanced Studies in Humanities at National Taiwan University (grant number: NTU-ERP-103R890502) are gratefully acknowledged.

References

REFERENCES

Acemoglu, D. and Akcigit, U. (2012) Intellectual property rights policy, competition and innovation. Journal of the European Economic Association 10, 1–42.Google Scholar
Autor, D. and Dorn, D. (2013) The growth of low-skill service jobs and the polarization of the US labor market. American Economic Review 103, 1553–1597.Google Scholar
Benz, S. (2012) Trading Tasks: A Dynamic Theory of Offshoring. Ifo working paper no. 150.Google Scholar
Card, D. and Krueger, A. B. (1996) School resources and student outcomes: An overview of the literature and new evidence from North and South Carolina. Journal of Economic Perspectives 10, 31–50.Google Scholar
Chen, H.-J. (2005) Educational systems, growth and income distribution: A quantitative study. Journal of Development Economics 76, 325–353.Google Scholar
Chen, H.-J. (2006) A note on the impact of voucher programs when there are nonlinear peer group effects. Macroeconomic Dynamics 10, 685–698.Google Scholar
Chen, H.-J. (2015). Intellectual property rights and skills accumulation: a North-South model of FDI and outsourcing. Journal of Macroeconomics 46, 328–343.Google Scholar
Chu, A. (2010) Effects of patent policy on income and consumption inequality in a R&D growth model. Southern Economic Journal 77, 336–350.Google Scholar
Chu, A., Cozzi, G. and Galli, S. (2014) Stage-dependent intellectual property rights. Journal of Development Economics 106, 239–249.Google Scholar
Cozzi, G. and Galli, S. (2014) Sequential R&D and blocking patents in the dynamics of growth. Journal of Economic Growth 19, 183–219.Google Scholar
Cozzi, G. and Impullitti, G. (2016) Globalization and wage polarization. Review of Economics and Statistics 98, 984–1000.Google Scholar
Dinopoulos, E. and Segerstrom, P. (1999) A Schumpeterian model of protection and relative wages. American Economic Review 89, 450–472.Google Scholar
Feenstra, R. C. and Hanson, G. H. (1996a) Foreign investment, outsourcing, and relative wages. In Feenstra, R. C., Grossman, G. M. and Irwin, D. A. (eds.), The Political Economy of Trade Policy, pp. 89–127. Cambridge, MA: MIT Press.Google Scholar
Feenstra, R. C. and Hanson, G. H. (1996b) Globalization, outsourcing, and wage inequality. American Economic Review 86, 240–245.Google Scholar
Gallini, N. (1992) Patent policy and costly imitation. Rand Journal of Economics 23, 52–63.Google Scholar
Glass, A. J. and Saggi, K. (2001) Innovation and wage effects of international outsourcing. European Economic Review 45, 67–86.Google Scholar
Glass, A. J. and Saggi, K. (2002) Intellectual property rights and foreign direct investment. Journal of International Economics 56, 387–410.Google Scholar
Glass, A. J. and Wu, X., (2007) Intellectual property rights and quality improvement. Journal of Development Economics 82, 393–415.Google Scholar
Glomm, G. and Ravikumar, B. (1992) Public versus private investment in skill: endogenous growth and income inequality. Journal of Political Economy 100, 818–834.Google Scholar
Grossman, G. M. and Helpman, E. (1991a) Quality ladders and product cycles. Quarterly Journal of Economics 106, 557–586.Google Scholar
Grossman, G. M. and Helpman, E. (1991b) Endogenous product cycles. Economic Journal 101, 1214–1229.Google Scholar
Herzer, D. and Nunnenkamp, P. (2013) Inward and outward FDI and income inequality: evidence from Europe. Review of World Economy 149, 395–422.Google Scholar
Howitt, P. (1999) Steady endogenous growth with population and R&D inputs growing. Journal of Political Economy 107, 715–730.Google Scholar
Kaganovich, M. and Zilcha, I. (1999) Education, social security, and growth. Journal of Public Economics 71, 289–309.Google Scholar
Krueger, A. B. and Lindahl, M. (2001) Education and growth: why and for whom? Journal of Economic Literature 39, 1101–1136.Google Scholar
Lai, E. (1995) The product cycle and the world distribution of income: a reformulation. Journal of International Economics 39, 369–382.Google Scholar
Lai, E. (1998) International intellectual property rights protection and the rate of product innovation. Journal of Development Economics 55, 133–153.Google Scholar
Levin, R., Klevorick, A., Nelson, R. and Winter, S. (1987) Appropriating the returns from industrial R&D. Brookings Papers on Economic Activity 3, 783–831.Google Scholar
Parello, C. P. (2008) A North-South model of intellectual property rights protection and skill accumulation. Journal of Development Economics 85, 253–281.Google Scholar
Pepall, L. M. and Richards, D. J. (1994) Innovation, imitation, and social welfare. Southern Economic Journal 60, 673–684.Google Scholar
Sayek, S. and Sener, F. (2006) Outsourcing and wage inequality in a dynamic product cycle model. Review of Development Economics 10, 1–19.Google Scholar
Segerstrom, P., Anant, T. and Dinopoulos, E. (1990) A Schumpeterian model of the product life cycle. American Economic Review 80, 1077–1091.Google Scholar
Vernon, R. (1966) International investment and international trade in the product cycle. Quarterly Journal of Economics 80, 190–207.Google Scholar