TY  - JOUR
AU  - Chin,Judith C.
AU  - Grossman,Gene M.
TI  - Intellectual Property Rights and North-South Trade
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2769
PY  - 1991
Y2  - January 1991
UR  - http://www.nber.org/papers/w2769
L1  - http://www.nber.org/papers/w2769.pdf
N1  - Author contact info:
Gene M. Grossman
International Economics Section
Department of Economics
Princeton University
Princeton, NJ 08544
Tel: 609/258-4823
Fax: 609/258-1374
E-Mail: grossman@princeton.edu
AB  - We study the incentive that a government in the South has to protect the intellectual property rights of Northern firms, and the consequences of the decision taken by the South for welfare in the North and for efficiency of the world equilibrium. We conduct our analysis in the context of a competition between a single Northern producer and a single Southern producer selling some good to an integrated world market. In this competition, only the Northern firm has the ability to conduct R&D in order to lower its production costs, but the Southern firm can imitate costlessly if patent protection for process innovations is not enforced by the government of the South. We find that the interests of the North and the South generally conflict in the matter of protection of intellectual property, with the South benefiting from the ability to pirate technology and the North harmed by such actions. A strong system of intellectual property rights may or may not enhance world efficiency.
ER  -