Endogenous Strength of Intellectual Property Rights: Implications for Economic Development and Growth

32 Pages Posted: 9 May 2012

See all articles by Theo S. Eicher

Theo S. Eicher

University of Washington - Department of Economics

C. Garcia-Peñalosa

National Center for Scientific Research (CNRS) - GREQAM; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: October 2007

Abstract

The key institution that determines sustained growth in R&D-based growth models is the strength of intellectual property rights, which are usually assumed to be exogenous. In this paper we endogenize the strength of the intellectual property rights and show how private incentives to protect these rights affect economic development and growth. Our model explains endogenous differences in intellectual property rights across countries as private incentives to invest in property rights generate multiple equilibria. We show that the resulting institutional threshold offers an explanation for why the effect of a transfer of institutions from one country to another depends on the quality of the institutions that were imported.

Keywords: Endogenous Intellectual Property Rights, growth

Suggested Citation

Eicher, Theo S. and Garcia-Penalosa, Cecilia, Endogenous Strength of Intellectual Property Rights: Implications for Economic Development and Growth (October 2007). Available at SSRN: https://ssrn.com/abstract=2054972 or http://dx.doi.org/10.2139/ssrn.2054972

Theo S. Eicher (Contact Author)

University of Washington - Department of Economics ( email )

Box 353330
Seattle, WA 98195-3330
United States

Cecilia Garcia-Penalosa

National Center for Scientific Research (CNRS) - GREQAM ( email )

Centre de la Vieille Charité
2, rue de la Charité
Marseille, 13002
France
+33 491 140746 (Phone)
+33 491 900227 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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