Would global patent protection be too weak without international coordination?
Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review
Author(s)
Related Research Unit(s)
Detail(s)
Original language | English |
---|---|
Pages (from-to) | 42-54 |
Journal / Publication | Journal of International Economics |
Volume | 89 |
Issue number | 1 |
Publication status | Published - Jan 2013 |
Link(s)
Abstract
In the standard model with free trade and social-welfare-maximizing governments à la Grossman and Lai (2004), cross-border positive policy externalities result in countries choosing a combination of patent strengths that is weaker than optimal from a global perspective. This paper introduces three new features to the analysis: trade and FDI barriers, firm heterogeneity and political economy considerations in setting patent policies. Based on calibration, we find that there would be global under-protection of patent rights when there is no international policy coordination. The empirical fact that firm revenues follow a fat-tailed distribution implies that the barriers to exploit inventions internationally are quite low, despite the fact that only a small fraction of firms sell overseas and an even smaller fraction of firms carry out FDI as a result of trade barriers. Furthermore, requiring all countries to harmonize their patent standards with the equilibrium standard of the most innovative country (the US) does not lead to global over-protection of patent rights. © 2012 Elsevier B.V.
Research Area(s)
- Harmonization, Intellectual property rights, Patents, TRIPS
Citation Format(s)
Would global patent protection be too weak without international coordination? / Lai, Edwin L.-C.; Yan, Isabel K.M.
In: Journal of International Economics, Vol. 89, No. 1, 01.2013, p. 42-54.
In: Journal of International Economics, Vol. 89, No. 1, 01.2013, p. 42-54.
Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review