Intellectual Property Right Protection And Strategic RD Subsidy: From A Developing Country's View

摘要

This paper investigates the competition of technology and production between the North (developed country) and the South (developing country), and how such competition may be affected by the international IPR protection level and the South's R &. D subsidy. Contributions of this paper are; firstly, it analyzes strategic relationships of IPR protection, R&D incentives and subsidy policies from a developing country's view, and find that the optimal subsidy rate of the South is non-monotonic with the international IPR protection due to various R&D efficiencies of firms. Secondly, this paper explores the double-edged effects of subsidy policies, and points out that the South's government should balance the innovation incentives and the welfare improvement when offering subsidies. Thirdly, this paper examines the welfare effects of the North's IPR protection and the South's subsidies. It argued that a tighter international IPR protection has ambiguous effects on the North's welfare when the South has secondary innovation. If the North firstly decides the optimal IPR protection level, the South's government offering subsidy to low R &- D efficiency firms would benefit the North's welfare.