Innovation, imitation and intellectual property rights: Introducing migration in Helpman’s model

Abstract

We introduce perfect international labour mobility between the North and the South into the Helpman [Helpman, E., 1993. Innovation, imitation, and intellectual property rights. Econometrica 61 (6), 1247–1280] North South model. We analyse the effect of strengthening the intellectual property rights (IPR) protection in the South and the effect of an increase in labour endowment there on the rate of innovation in the North and on the volume of South North migration in the steady state equilibrium. The strengthening of IPR protection may produce a positive effect on the rate of innovation if the consumers are very patient in their intertemporal choice. The increase in the Southern labour endowment also has a positive effect on the rate of innovation. These results are opposite to those obtained in the Helpman [Helpman, E., 1993. Innovation, imitation, and intellectual property rights. Econometrica 61 (6), 1247–1280] model.