Migration and Imitation

44 Pages Posted: 27 Jan 2020

See all articles by Olena Ivus

Olena Ivus

Smith School of Business

Alireza Naghavi

University of Bologna - Department of Economics

Larry D. Qiu

The University of Hong Kong - Faculty of Business and Economics; Hong Kong University of Science & Technology (HKUST) - Department of Economics

Date Written: December 6, 2019

Abstract

This paper develops a North-South trade model with heterogeneous labour and horizontally differentiated products and compares the implications of two policies: Southern intellectual property rights (IPRs) and Northern immigration policy that aims to attract Southern talent as means of preempting imitation. Individuals self-select into becoming entrepreneurs and innovate (imitate) in the North (South). The likelihood of imitation depends on product quality, imitator's ability, and strength of IPRs. Several interrelated channels of competition are identified. Allowing high-ability migration when IPRs protection in the South is weak shifts imitation to low-quality and innovation to high-quality products. The outcome is in stark contrast to the policy of strengthening IPRs, which limits low-quality imitation and encourages low-quality innovation. High-ability migration also increases the income of low-ability entrepreneurs, as well as the average quality of products in the high-ability imitation sector in the South.

Keywords: Intellectual property rights, High-skilled migration, Imitation, Innovation, Product quality, Entrepreneur ability

JEL Classification: F22, O31, O34, J24, K37, O38

Suggested Citation

Ivus, Olena and Naghavi, Alireza and Qiu, Larry Dongxiao, Migration and Imitation (December 6, 2019). Available at SSRN: https://ssrn.com/abstract=3512957 or http://dx.doi.org/10.2139/ssrn.3512957

Olena Ivus (Contact Author)

Smith School of Business ( email )

Smith School of Business - Queen's University
143 Union Street
Kingston, Ontario K7L 3N6
Canada

Alireza Naghavi

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, 40126
Italy

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

Larry Dongxiao Qiu

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong
China

Hong Kong University of Science & Technology (HKUST) - Department of Economics ( email )

School of Economics and Finance
University of Hong Kong
Pokfulam
Hong Kong

HOME PAGE: http://www.bm.ust.hk/~larryqiu/

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