حقوق مالکیت معنوی و بهبود کیفیت

This paper explores why theories about the effects of intellectual property rights (IPR) protection on foreign direct investment (FDI) and innovation have reached mixed conclusions. In our model, Northern firms innovate to improve the quality of existing products and may later shift production to the South through FDI. Southern firms may then imitate the products of multinationals. We find that imitation can increase FDI and innovation for quality improvements, whereas the opposite occurs when innovators develop new varieties. Hence, stronger IPR protection, by reducing imitation, may shift innovation away from improvements in existing products toward development of new products.

Intellectual property rights (IPR) protection is the subject of heated debate in international policy negotiations. Many developing countries feel that the Trade-Related Aspects of Intellectual Property (TRIPs) agreement signed in the Uruguay round benefits rich countries at the expense of the poor. McCalman (2002) finds evidence sympathetic to their view: his calculations indicate that the United States is the major beneficiary and developing countries are major contributors. Consequently, developing countries are now pushing to have intellectual property issues revisited in the new Doha round. Stronger IPR protection is claimed to encourage foreign direct investment (FDI) and innovation. FDI is heralded as the key to international technology transfer. Yet the bulk of FDI occurs between developed countries—see Markusen (1995). So developing countries need to have stronger IPR protection to attract FDI that will bring in state-of-the-art technologies, or so the story goes. Logic along these lines was used to help sell the TRIPs agreement to reluctant developing countries. But how robust is this reasoning? How does protection of IPR affect FDI and innovation? Are there circumstances in which stronger protection of IPR does not encourage FDI and innovation? Is there a risk that IPR protection could impede, rather than promote, the development prospects for countries that lag behind the technology frontier? A literature has emerged to address these questions.1 In Helpman (1993), innovation occurs in the North and imitation in the South. Weaker protection of intellectual property is an increase in the exogenous imitation intensity so that Northern firms face a higher risk that their products will be imitated. Yet, he finds that weak protection of intellectual property rights increases the aggregate rate of innovation.2 Helpman also considers a model with FDI, but innovation is then exogenous. Lai (1998) modifies Helpman's model to consider the effects of imitation targeting multinational production on innovation. He finds that the aggregate rate of innovation and the flows of FDI increase with stronger intellectual property rights in the South.3 Glass and Saggi (2002) cast doubt on whether stronger Southern IPR protection must always encourage FDI and innovation. They argue that stronger Southern IPR protection reduces the aggregate rate of innovation and the flow of FDI regardless of whether FDI or imitation targeting Northern production serves as the primary channel of international technology transfer. In their model, stronger IPR protection is an increase in the cost of imitation, which causes a reduction in the rate of imitation. They identify two effects of the increased cost of imitation: a labor wasting effect due to the increased amount of labor used for imitation and an imitation tax effect due to the decreased incentive for imitation. They show that each effect reduces FDI and innovation, and neither effect arose in previous analysis with exogenous and costless imitation. So the reason for the difference in results appears to be the difference in how IPR protection was modeled: as an increase in the cost of imitation rather than as an exogenous decrease in the imitation intensity. But the models differ in another important way. In the Glass and Saggi model, innovations are improvements in the quality of existing products rather than introduction of new varieties. Could the difference in the type of innovation alter the consequences of IPR protection? To answer that question, this paper considers an exogenous decrease in the imitation intensity in a setting with FDI and where innovations take the form of quality improvements. We find that stronger Southern IPR protection discourages FDI and innovation, or (in the reverse direction) that greater imitation encourages both FDI and innovation. These results match those of Glass and Saggi (2002), but cannot stem from higher imitation cost since imitation is costless here.4 Our model is kept identical to Lai's model in all respects possible except for the type of innovation, so we conclude that the effects of IPR protection can depend on the nature of innovation. When innovations are new varieties, stronger Southern IPR protection encourages FDI and innovation, but when innovations are higher quality levels, FDI and innovation can fall. When there is FDI, stronger Southern IPR protection may shift the composition of innovation away from improvements in existing products toward the development of new products. The overall effect on innovation (and FDI) is then unclear. However, when there is no FDI, an exogenous increase in imitation always increases innovation, regardless of the type of innovation. We also check our results for robustness to allowing innovation to be done by followers (firms other than the former incumbents). We provide a discussion of the different forces that arise, with and without FDI and for quality or variety inventions. This comparison helps to clarify why imitation discourages innovation for variety innovations (or quality innovations by followers) that occur when there is FDI. This discussion also includes an analysis of the different effects of imitation on the Northern relative wage: imitation increases the relative wage if there is FDI but otherwise decreases the relative wage. Effects on the relative wage are important as they lead to reallocation of income across countries. Our analysis helps explain differences in results in order to be better equipped to assess implications for IPR policy.

This paper examines the impact of imitation on FDI and innovation. When products are more likely to be imitated when produced through FDI, innovators are more inclined to keep production in the North where they are safer from being imitated. Also, the shorter duration of profits suggests that the incentive to innovate should fall. However, the full story is more complex, as aggregate expenditure and the Northern relative wage rise to restore and even expand the incentives for FDI and innovation. In the end, increased imitation need not reduce FDI or innovation. In Lai (1998), innovation involves developing new varieties (instead of higher qualities), and an exogenous increase in imitation intensity reduces FDI and innovation. But in Glass and Saggi (2002), innovations are quality improvements and imitation (endogenously modeled through a reduction in the cost of imitation) increases FDI and innovation. Our work demonstrates that the findings of Glass and Saggi (2002), that imitation spurs on FDI and innovation, can hold even when imitation is exogenous. Our work therefore sheds light on why the findings of Lai (1998) and Glass and Saggi (2002) differ: it cannot be only due to whether imitation is endogenous. Our model matches Lai's model in all aspects but the type of innovation. We conclude that, in the presence of FDI, the type of innovation influences the effects of imitation on FDI and innovation. When there is FDI, imitation may encourage quality improvements in existing products, while discouraging the introduction of new varieties.