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On the trade, growth, and welfare effects of intellectual property rights protection
Author(s) -
Saito Yuki
Publication year - 2018
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.1002/soej.12277
Subject(s) - intellectual property , welfare , international trade , economics , international economics , property rights , nash equilibrium , business , microeconomics , market economy , law , political science
To examine how intellectual property rights protection affects trade, growth, and welfare, I develop a two‐country R&D‐based growth model in which final goods firms in both countries determine the range of imported varieties in the overall use of intermediate inputs. I show that strengthening patent protection in either country increases the range of imported varieties of intermediate goods and stimulates economic growth in the country that strengthened patent protection. Moreover, I also show that the Nash equilibrium level of patent protection is stronger than the globally optimal level of patent protection.