A Study On The Technological Spillover Effect Of International Trade And TRIPS Agreement

In the past30years, the technological spillover effect of international trade isbecoming a major source of technological progress in developing countries.According to the World Bank website database, global R&D activities are highlyconcentrated in traditional Western countries and several Asian newly industrializedeconomies. For developing countries, which are in the backward position of R&Dinvestment, taking full advantage of the technological spillover effect of internationaltrade to achieve sustainable economic growth is an important proposition. The TRIPSagreement, which is one of the three pillars of the WTO system with the GATT andGATS, set a series of important international rules in trade-related aspects ofintellectual property rights. It has an important impact on the technological spillovereffect of international trade.Intellectual property rights encourage developing countries to increase theirR&D investment, in order to strength independent innovation and achieve continuousadvances in technology. Meanwhile, Intellectual property rights suppress theabsorption of advanced technologies by increasing imitation costs for developingcountries. Constrained in the TRIPS Agreement, developing countries face a dilemmabetween encouraging innovation and promoting imitation of foreign advancedtechnologies. The same intensity of intellectual property protection with differentsocio-economic conditions, may lead to the different technological spillover effect ofinternational trade. Set in the framework of the TRIPS agreement, the infringement ofintellectual property rights may discourage the innovation in developing countries, buttoo stringent intellectual property protection would impede imitation throughinternational trade in developing countries. It is a serious problem that to deal with theminimum strength of intellectual property protection obligations set by the TRIPSagreement for developing countries. It is also a crucial problem that to protect theintellectual property rights and to avoid overprotection. Whether the currentarrangements for intellectual property protection system can promote internationaltrade, technology spillover and economic growth or not, is related to the nationalinnovation strategy and sustainable economic development strategy.Based on the literature review of the theoretical and empirical research, thispaper establishes a theoretical model to analyze the spillover of the North-South andthe impact of economic growth in the South with the change of strengthen of theSouthern intellectual property rights protection, which is based on the endogenousgrowth theory and the North-South technology spillover analysis framework. This paper comments the TRIPS agreement，international experiences of intellectualproperty protection and economic development， and the intellectual propertyprotection in China under the TRIPS agreement. Finally, it uses the fixed effect paneldata model and quantile regression analysis to conduct an empirical test, with thesub-provincial data of China.If the relative technological level of the North to the South is high, strengthen thesouthern intellectual property rights protection can promote the economic growth inSouth. The impact of intellectual property rights protection on economic growthmainly depends on the trade-off between imitation and innovation. Increasing thestrength of intellectual property rights protection can motivate the South to invest inthe R&D, and promote the source of innovation in the South changing from spillovereffect of international trade to self-depend innovation. If the relative technologicallevel of the North to the South is low, the available northern technology for the Southis larger. The South can take advantage of the low cost of imitation to achieve fastereconomic growth. Strengthening the intellectual property rights protection in theSouth, can inhibit the spillover effect of international trade, and is not conducive tothe southern economic growth. From the above analysis, the impact of IPR protectionon growth in the South is not a simple linear relationship. Whether the impact ispositive or negative depends on the technology gap between the relative technologicalof the North to the South. Where the technology gap between the North and the Southis less than a critical value, strengthen intellectual property rights protection canpromote growth in the South. Where the technology gap between the North and theSouth is more than a critical value, strengthen intellectual property rights protectioncan inhibit growth in the South. The intellectual property rights protection affectseconomic growth in the South showed a significant threshold effect characteristicdepending on the relative technological level.China, which is a very latecomer country and uneven in the economicdevelopment, should give full play to the intellectual property system in enhancing thecountry’s economic strength and international competitiveness. The "Outline ofNational Intellectual Property Strategy" should be implemented, and the role ofintellectual property protection on promoting the economic growth should be paidmore attention, and the appropriate level of IPR protection should be taken by eachprovince.