Cross-Border Intellectual Property Rights: Contract Enforcement and Absorptive Capacity

Quaderni DSE Working Paper No. 809

25 Pages Posted: 7 Feb 2012 Last revised: 5 Apr 2013

See all articles by Alireza Naghavi

Alireza Naghavi

University of Bologna - Department of Economics

Yingyi Tsai

National University of Kaohsiung

Multiple version iconThere are 3 versions of this paper

Date Written: February 7, 2012

Abstract

This paper studies cross-border intellectual property rights (IPR) as a North-South contract using a Nash bargaining approach and distinguishes between the outcome and its actual enforcement. The absorptive capacity of the Southern country to exploit technology transfer plays a key role in the negotiated level of IPRs and its post-treaty enforcement. The optimal level of IPR protection relates positively to absorptive capacity. This provides a rationale for the longer time-frame provided to least developed countries in Article 66 of TRIPS to implement its provisions. In addition, monitoring is only effective in preventing contract violation up to a critical level of absorptive capacity. We relate this to the US Trade Representative “Special 301” report, which flags countries that deny adequate IPR protection as “priority watch list”. While disputes with less developed economies are promptly resolved, emerging economies, where most losses from copyright piracy originates from, continue to remain on the list.

Keywords: Intellectual property rights, TRIPS, Nash Bargaining, contract enforcement, development, absorptive capacity, monitoring

JEL Classification: O34 , F13, F53, D78, L10, O33, C70

Suggested Citation

Naghavi, Alireza and Tsai, Yingyi, Cross-Border Intellectual Property Rights: Contract Enforcement and Absorptive Capacity (February 7, 2012). Quaderni DSE Working Paper No. 809. Available at SSRN: https://ssrn.com/abstract=2000738 or http://dx.doi.org/10.2139/ssrn.2000738

Alireza Naghavi (Contact Author)

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, 40126
Italy

HOME PAGE: http://alirezanaghavi.altervista.org/

Yingyi Tsai

National University of Kaohsiung ( email )

Department of Applied Economics
700 Kaohsiung University Rd
Kaohsiung, 811
Taiwan
+886 7 5919189 (Phone)
+886 7 2169365 (Fax)

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