Trade, Imitative Ability and Intellectual Property Rights

University of Nottingham Research Paper No. 2006/25

50 Pages Posted: 12 Sep 2006

See all articles by Rod Falvey

Rod Falvey

Bond University - Department of Economics

David Greenaway

University of Nottingham - School of Economics

Neil Foster-McGregor

UNU-MERIT

Date Written: September 2006

Abstract

Economic theory suggests some ambiguity concerning the effects of strengthening intellectual property rights (IPRs) on international trade. Here we extend the empirical literature that attempts to resolve this ambiguity. We use panel data to estimate a gravity equation for manufacturing exports, in aggregate and by industry, from five advanced countries to 69 developed and developing countries over the period 1970-99. In particular, we use threshold regression techniques to determine whether the impact of IPR protection on trade depends upon the level of development, imitative ability and market size of the importing country. We confirm the importance of the importers' imitative ability, and also find some evidence of a role for market size in this relationship. The individual industries present different patterns of thresholds and coefficients, with total manufacturing closely reflecting that of fabricated metal products.

Keywords: Intellectual Property Rights, International Trade, Gravity Equation, Imitative Ability

JEL Classification: F10, F13, O34

Suggested Citation

Falvey, Rod and Greenaway, David and Foster-McGregor, Neil, Trade, Imitative Ability and Intellectual Property Rights (September 2006). University of Nottingham Research Paper No. 2006/25, Available at SSRN: https://ssrn.com/abstract=929674 or http://dx.doi.org/10.2139/ssrn.929674

Rod Falvey (Contact Author)

Bond University - Department of Economics ( email )

Bond University - Department of Economics
Gold Coast, Queensland 4229
Australia

David Greenaway

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom
+44 115 951 5469 (Phone)
+44 115 951 4159 (Fax)

Neil Foster-McGregor

UNU-MERIT ( email )

Keizer Karelplein 19
Maastricht, 6211TC
Netherlands

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