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Review of World Economics

, Volume 145, Issue 3, pp 373–404 | Cite as

Trade, imitative ability and intellectual property rights

  • Rod Falvey
  • Neil Foster
  • David Greenaway
Original Paper

Abstract

Economic theory suggests some ambiguity concerning the effects of strengthening intellectual property rights (IPRs) on international trade. Here we extend the empirical literature that attempts to resolve this ambiguity. We use panel data to estimate a gravity equation for manufacturing exports, in aggregate and by industry, from five advanced countries to 69 developed and developing countries over the period 1970–1999. In particular, we use threshold regression techniques to determine whether the impact of IPR protection on trade depends upon the level of development, imitative ability and market size of the importing country. We confirm the importance of the importers’ imitative ability, and also find some evidence of a role for market size in this relationship. The individual industries present different patterns of thresholds and coefficients, with Total Manufacturing closely reflecting that of Fabricated Metal Products.

Keywords

Intellectual property rights International trade Gravity equation Imitative ability 

JEL Classification

F10 F13 O34 

Notes

Acknowledgments

Falvey and Greenaway acknowledge financial support from the Leverhulme Trust under Programme Grant F/00 114/AM. We thank a referee for helpful comments.

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Copyright information

© Kiel Institute 2009

Authors and Affiliations

  1. 1.School of EconomicsUniversity of NottinghamNottinghamUK
  2. 2.Department of EconomicsUniversity of ViennaViennaAustria

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