Intellectual property, quality improvements, and exports: Theory and empirical evidence

This thesis examine the effects of stronger intellectual property rights (IPR) protection in developing countries including patent protection and trademark protection on technology transfer, exports and welfare of developing countries.; Chapter 2 develops a model to analyze the effects of stronger IPR protection on the ability of developing countries to break into export markets. I find that stronger IPR would enhance technology transfer and reduce the South firm's marginal production cost, thereby increasing its exports. Welfare in the South would rise if that country has high absorptive ability but could fall under a weak capacity to implement technologies.; Chapter 3 investigates the effects of IPRs on the pattern of trade in developing countries. Intellectual property rights, as a type of institutional endowment, could potentially change the pattern of trade through influencing the efficiency of technology transfer and contract enforcement. To test for the theoretical prediction from chapter 2, I construct a measure of patent intensity across industries to capture the significance of intellectual property rights. I find that stronger IPRs expand exports in developing countries. The extent of this effect differs across industries. For industries with high patent intensities, the effects are larger. Moreover, I find that the effects are larger in developing countries with strong learning capacity.; Chapter 4 examines the relationship between trademark protection, quality improvement and exports in developing countries. Trademarks indicate the inherent quality or other distinguishing features of identified products. Strong trademark protection can lower the firms' signaling cost and the consumers' costs of searching for preferred quality characteristics. By solving the signalling model, I show that strengthened trademark protection in developing countries may be expected to raise the average quality of products on the export market.