Working Paper: NBER ID: w8704
Authors: Gene M. Grossman; Edwin L.C. Lai
Abstract: We study the incentives that governments have to protect intellectual property in a trading world economy. We consider a world economy with ongoing innovation in two countries that differ in market size, in their capacities for innovation, and in their absolute and comparative advantage in manufacturing. We associate the strength of IPR protection with the duration of a country's patents that are applied with national treatment. After describing the determination of national policies in a non-cooperative regime of patent protection, we ask, Why are patents longer in the North? We also study international patent agreements by deriving the properties of an efficient global regime of patent protection and asking whether harmonization of patent policies is necessary or sufficient for global efficiency.
Keywords: Intellectual Property Rights; International Trade; Patent Protection
JEL Codes: O34; F13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| North's market size and R&D advantage (L63) | Length of patents in the north (O34) |
| Length of patents in the north (O34) | Length of patents in the south (O34) |
| North's market size and R&D advantage (L63) | National patent policies (O38) |
| Harmonization of patent policies (O34) | Global efficiency (D61) |
| Welfare levels of the north and south (I30) | Efficient patent lengths (O34) |
| Length of patents in the south (O34) | Welfare levels of the north (I30) |