Document Type

Working Paper

Publication Date


Working Paper Number

WP # 06008, March 2006


We develop a model with one innovating northern firm and heterogeneous southern firms that compete in a final product market. We assume southern firms differ in their intrinsic costs and their ability to adapt technology and study southern incentives to protect intellectual property rights. We find that in a non-cooperative equilibrium governments will resist IPR protection, but collectively southern countries benefit from some protection. We show that countries with more efficient firms prefer higher collective IPR protection than those with less efficient firms. However, given the aggregate level of IPR protection, it is more efficient if the more efficient countries have weaker IPR protection.

Publication Status

Published in Canadian Journal of Economics, Vol. 41 no. 3 (August 2008): 894-925.

JEL Classification

F13, O34

File Format



36 pages