Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Nov, 1993, Volume 61, Issue 6

Innovation, Imitation, and Intellectual Property Rights<1247:IIAIPR>2.0.CO;2-C
p. 1247-1280

Elhanan Helpman

The debate between the North and the South about the enforcement of intellectual property rights is examined within a dynamic general equilibrium framework in which the North invents new products and the South imitates them. A welfare evaluation of a policy of tighter intellectual property rights is provided by decomposing the welfare change into four items: (a) terms of trade; (b) production composition; (c) available products; and (d) intertemporal allocation of consumption. The paper provides a theoretical evaluation of the effect of each one of these items and their relative size. The analysis proceeds in stages. It begins with an exogenous rate of innovation in order to focus on the first two elements. The following two components are added by endogenizing the rate of innovation. Finally, the paper considers the role of foreign direct investment.

Log In To View Full Content