Intellectual Property Rights and International R&D Competition
IMF Working Papers, June 1, 2001
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- Intellectual Property Rights and International R&D Competition
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Bibliographic details
- Authors: Stefania Scandizzo
- Published: June 1, 2001
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451850369.001
Overview
- Examines a country's incentives for intellectual property rights (IPR) protection in a global trading environment.
- Identifies a time inconsistency problem intrinsic to IPR protection: ex ante strong protection is warranted to promote innovation, but once discovery takes place there is an incentive to lower protection.
- Finds that the sub optimal but time consistent policy involves an insufficient level of protection and, therefore, of innovation.
- Notes differences across countries: in more technologically advanced economies reputational considerations may be sufficient to maintain strong protection; otherwise commitment mechanisms may be required.
Key findings
- Time inconsistency: ex ante vs ex post incentives create a divergence between socially optimal IPR protection and time-consistent policy.
- Consequence: insufficient IPR protection under a time-consistent policy leads to insufficient innovation.
- Role of technological advancement: more technologically advanced economies can rely on reputational considerations to sustain strong IPR protection.
- Alternatives when reputation is insufficient:
- Participation in the World Trade Organization as a commitment mechanism.
- More controversially, some form of bilateral punishment.
Policy recommendations and mechanisms
- Strengthen commitment to IPR protection through international arrangements:
- Participation in the World Trade Organization.
- Consideration (with caution) of bilateral punishment mechanisms to deter ex post erosion of IPR protection.
- Rely on reputational incentives in technologically advanced economies where feasible.
- Recognize that without credible commitment mechanisms, domestic policy will tend toward suboptimal IPR protection and reduced innovation.
Subjects and keywords highlighted in the paper
- Subjects: Competition, Consumption, Economic sectors, Financial markets, Foreign corporations, Income, National accounts, Personal income, Tax incentives, Technology
- Keywords: commitment IPR Policy, Competition, consumer surplus, Consumption, Foreign corporations, Global, home government, imitation, Income, innovation, Intellectual property rights, IPR policy, IPR protection, IPR regime, monopoly profits, time inconsistency, WP
Stefania Scandizzo. "Intellectual Property Rights and International R&D Competition", IMF Working Papers 2001, 081 (2001), accessed 9/17/2026, https://doi.org/10.5089/9781451850369.001
Content in this bundle
- Intellectual Property Rights and International R&D Competition - WP/01/81