Author(s)
Source
Journal of International Economics, Vol. 80, pp. 260-279, 2010
Summary
This paper analyzes the economic effects of international technology trade.
Policy Relevance
Nations can garner many benefits through policies that favor international technology trade.
Main Points
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Countries benefit from international trade in technology because they obtain the best invention from a larger pool of inventions.
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International trade in technology increases the extent of the market for inventions and thereby improves the quality of innovation.
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Technology trade lowers prices, increases outputs, and increases the volume of trade in differentiated products.
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When traded products are not close substitutes, international markets for technology generate gains from trade.
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The results of the analysis were valid whether the technology transfer happened either through expropriation or imitation.
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Protection of intellectual property rights preserves incentives for entry of inventors and improves the quality of innovation.