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North-South Trade and Directed Technical Change

AuthorsBonfiglioli, Alessandra CSIC ORCID; Gancia, Gino
KeywordsEconomic growth
North-South Trade
Directed Technical Change
Intellectual Property Rights
Cross-Country Income Differences
Issue Date15-Sep-2007
SeriesUFAE and IAE Working Papers
AbstractIn a world where poor countries provide weak protection for intellectual property rights (IPRs), market integration shifts technical change in favor of rich nations. Through this channel, free trade may amplify international income differences. At the same time, integration with countries where IPRs are weakly protected can slow down the world growth rate. An important implication of these results is that protection of intellectual property is most beneficial in open countries. This prediction, which is novel in the literature, is consistent with evidence from a panel of 53 countries observed in the years 1965-1990. The paper also provides empirical support for the mechanism linking North-South trade to the direction of technical change: an increase in import penetration from low-wage, low-IPRs, countries is followed by a sharp fall in R&D investment in a panel of US manufacturing sectors.
DescriptionThis is a revised and extended version of a previous paper circulated under the title "Globalization, Divergence and Stagnation".-- Trabajo publicado como artículo en Journal of International Economics 76(2): 276-295 (2008).--
Appears in Collections:(IAE) Informes y documentos de trabajo

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