The role of intellectual property rights in a directed technical change model

• Type: Article in International Scientific Journal
• Date: 2021

Authors

Óscar Afonso (Author) FEP; Magalhaes, M (Author) Other

Journal

Title: INTERNATIONAL JOURNAL OF FINANCE & ECONOMICS

Vol. 26 No. 2

Pages: 2142-2176

ISSN: 1076-9307

Publisher: John Wiley & Sons

Indexing

ISI Web of Knowledge - 2 Citations

Scopus - 1 Citation

Other information

Authenticus ID: P-00S-K9Q

DOI: 10.1002/ijfe.1899

Abstract (EN): We propose a two country, Innovator and Follower, directed technical change model between tradable and nontradable sectors. The Innovator performs innovative R&D and the Follower adopts the available technological knowledge. Substitutability between sectors, scale effects, international IPRs protection and R&D productivity determine the economic growth and the technological-knowledge bias, which, in turn, affects relative prices and wages. Wages are higher in the Innovator, namely in the nontradable sector under strong substitutability. Technological-knowledge and intra-country wage inequality are biassed towards the tradable sector, the effect being reinforced by positive IPRs protection and substitutability. Real exchange rates accommodate the Balassa-Samuelson proposal and increase with positive IPRs protection and substitutability. The effect of IPRs on the steady-state growth rate is ambiguous, depending on the substitutability. Theoretical results are also influenced by labor movements and are confirmed by a calibrated exercise for 11 developed/Innovator countries and 11 developing/Follower countries, and by the empirical evidence.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 35