Dynamic Gains from Trade Agreements with Intellectual Property Provisions

59 Pages Posted: 28 Oct 2021

See all articles by Ana Maria Santacreu

Ana Maria Santacreu

Federal Reserve Banks - Federal Reserve Bank of St. Louis

Multiple version iconThere are 2 versions of this paper

Date Written: July, 2021

Abstract

I develop a quantitative multi-country trade model of innovation and technology licensing to study the short- and long-term effects of trade agreements with intellectual property (IP) provisions. A trade agreement involves determining the level of tariffs and IP protection as Nash bargaining between a developed and a developing country. The agreement increases welfare, innovation, and growth in the long-run. However, gains accrue differently across countries along the transition. Developing countries experience short-run losses, as they now pay higher licensing prices. An agreement designed by a politically-motivated government could mitigate these losses, but at the expense of lower growth and welfare.

Keywords: Technology Licensing, Trade Agreements, Intellectual Property Rights

JEL Classification: F12, O33, O41, O47

Suggested Citation

Santacreu, Ana Maria Maria, Dynamic Gains from Trade Agreements with Intellectual Property Provisions (July, 2021). FRB St. Louis Working Paper No. 2021-10, Available at SSRN: https://ssrn.com/abstract=3951633 or http://dx.doi.org/10.20955/wp.2021.010

Ana Maria Maria Santacreu (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of St. Louis ( email )

411 Locust St
Saint Louis, MO 63011
United States

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