Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82600
Authors: 
Borota, Teodora
Year of Publication: 
2010
Series/Report no.: 
Working Paper, Department of Economics, Uppsala University 2010:6
Abstract: 
Recent evidence on world trade patterns reveals North-South specialization across products of the same industries and product groups but different quality, which is not matched by the predictions of traditional and new trade theory. This paper analyzes a model of North-South trade and endogenous growth through innovation and imitation that can predict the observed trade patterns. The model is used to re-examine the impact of trade and Intellectual Property Rights (IPR) protection on both the innovation in the North and the imitational lag of the South. Opening to trade increases the growth rate and welfare of both regions, but results in a larger lag in the quality level of the South. With free trade the quality lag of the South is positive even with no IPR protection as a result of a revealed comparative advantage in lower quality goods production and trade. This contradicts the common predictions of Southern take-over of the whole industries due to bad IPR enforcement. Stronger IPR protection has a negative effect on growth and deteriorates the lag of the South, but the welfare effects of the alternative IPR policy instruments may be different.
Subjects: 
North-South trade
quality heterogeneity
endogenous growth
innovation and imitation
intellectual property rights
JEL: 
F12
F43
O31
O33
O34
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
609.71 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.