Gino Gancia: Institute for International Economic Studies, Stockholm University, Postal: Stockholm University, S-106 69 Stockholm, Sweden
Abstract: In a world where poor countries provide weak protection for intellectual property rights, market integration will systematically shift technical change in favor of rich nations. For this reason, free trade can increase international income differences. At the same time, integration with countries where intellectual property rights are weakly protected can have a large adverse effect on the world growth rate. These results provide a strong rationale for global regulations, critical in a system of interdependent economies for sustaining innovation and reducing income inequality. Supportive empirical evidence is presented.
37 pages, June 13, 2003
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