Intellectual Property Rights and International R&D Competition

25 Pages Posted: 30 Jan 2006

Date Written: June 2001

Abstract

This paper examines a country's incentives for intellectual property rights (IPR) protection in a global trading environment. There is a time inconsistency problem intrinsic to IPR protection: ex ante strong protection is warranted to promote innovation, but once discovery takes place there is an incentive to lower protection. The sub optimal but time consistent policy involves an insufficient level of protection and, therefore, of innovation. In more technologically advanced economies reputational considerations may be sufficient to maintain strong protection. Otherwise a commitment mechanism, such as participation in the World Trade Organization, or, more controversially, some form of bilateral punishment, may be used.

Keywords: Intellectual property rights, innovation, imitation, time inconsistency

JEL Classification: F12, O31, O34

Suggested Citation

Scandizzo, Stefania, Intellectual Property Rights and International R&D Competition (June 2001). IMF Working Paper No. 01/81, Available at SSRN: https://ssrn.com/abstract=879605

Stefania Scandizzo (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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