Economic Growth with Imperfect Protection of Intellectual Property Rights

The growth effects of intellectual property right (IPR) protection are examined in a quality-ladder model of endogenous growth. Stronger IPR protection, which reduces the probability of imitation, raises the reward for innovation. However, stronger protection reduces the number of competitive sectors, in which it is easier to innovate than in monopolistic sectors, thus concentrating researchers into fewer competitive sectors. As R&D projects take time until they are completed, concentration of R&D activity in a field raises the possibility of duplication of innovation, thereby hindering growth. In several settings, we show that imperfect, rather than perfect, protection maximizes growth.intellectual property rights, endogenous growth, quality ladder, imitation, leapfrogging, duplication.

Internationalising to create Firm Specific Advantages: Leapfrogging strategies of U.S. Pharmaceutical firms in the 1930s and 1940s & Indian Pharmaceutical firms in the 1990s and 2000s

Internationalisation is a useful strategy to gain firm specific advantages during periods of technological discontinuity. The pharmaceutical industry offers us two such episodes as examples: when the antibiotics revolution was beginning and when the possibilities of genetic routes to new drug discovery were realised. This paper compares the strategies adopted by laggard U.S. firms scrambling to gain capabilities in antibiotics, and Indian firms equally eager to acquire positions in new biotechnology based drugs and shows that both groups used internationalisation strategies to gain technological advantages and build up their firm specific advantages.Technological leapfrogging, Internationalisation Strategies, Indian Pharmaceutical industry, Antibiotics revolution, US Pharmaceuticals

Environmental policy under product differentiation and asymmetric costs - Does Leapfrogging occur and is it worth it?

This paper studies the influence of environmental policies on environmental quality, domestic firms, and welfare. Point of departure is Porter’s hypothesis that unilateral environmental regulation may enhance the competitiveness of domestic firms. This hypothesis has recently received considerable support in theoretical analyses, especially if imperfectly competitive markets with strategic behavior on behalf of the agents are taken into account. Our work contributes to this literature by explicitely investigating the implications of asymmetric cost structures between a domestic and a foreign firm sector. We use a partial-equilibrium model of vertical product differentiation, where the consumption of a product causes environmental harm. Allowing for differentiated products, the domestic industry can either assume the market leader position or lag behind in terms of the environmental quality of the produced product. Assuming as a benchmark case that the domestic industry lags behind, we investigate the possibility of the government to induce leapfrogging of the domestic firm, i.e. a higher quality produced by the domestic firm after regulation than that of the competitor prior to regulation. It is shown that in the case of a cost advantage for the domestic firm in the production process the imposition of a binding minimum quality standard can serve as a tool to induce leapfrogging. In case of a cost disadvantage the same result can be achieved through an adequate subsidization of quality dependend production costs. Thus, careful regulation enables the domestic firm in both scenarios to better its competitive position against foreign competitors and to earn larger profits. Additionally, environmental quality and welfare can be enhanced.

Innovation and Imitation at Various Stages of Development

A simple model of imitation and innovation is developed to explain a complicated picture of relative productivity growth in different countries. The model makes difference between global and local innovations and does not assume that a country always imitates the most advanced technology. It is shown that there are three types of stationary states, where only imitation, only innovation or a mixed policy prevails. We demonstrate how one can find the stationary states and check their stability for a broad class of imitation-innovation cost functions. Using World Bank statistical data for the period of 1980-1999, we reveal the dependence of innovation and imitation costs on GDP per capita measured in PPP and on an indicator of investment risk. An appropriate choice of two adjustment parameters of the model gives a possibility to generate trajectories of more than 80 countries and, for most of them, get qualitatively correct pictures of their movement. It turns out that three groups of countries behave differently, and there is a tendency to converge inside each group. Increase in institutional quality get countries out of underdevelopment traps, from the imitation area to a better steady state where local innovations and imitations are jointly used. All countries with high quality of institutions are moving toward the area where pure innovation policy prevails.innovation; imitation; institutional quality

Leapfrogging into hydrogen technology: China's 1990-2000 energy balance

As a country beginning its motorization process, China must confront the problems attached to an oil-based car society. In adopting conventional automobile technology, the country would aggravate an already unstable oil balance while pushing up carbon dioxide levels. Not only would domestic problems emerge, but international concerns regarding oil shortage, global pollution, and the energy security balance would also result from erecting a traditional automotive infrastructure. One viable alternative the country can consider is a leapfrog towards hydrogen technology. By using hydrogen as the fuel source and investing in a hydrogen-based car society, China could overstep the problems created by an oil-based infrastructure. When examining China's potential for undertaking this technology leapfrog, China's energy past and future must be considered. China's energy balance and energy resources play a crucial role in determining the country's leapfrogging possibility. This paper analyzes one facet in China's energy balance by scrutinizing energy expenditures between 1990-2000. By looking at data compiled from major international and academic sources, an overview of China's past energy consumption and production activities is presented. Patterns and discrepancies in Chinese coal, oil, natural gas, and nuclear production are unveiled and the trends considered in relation to the country's energy balance. Each energy sector is analyzed separately for consumption and production trends. Because implementation of hydrogen technology is governed by energy resource availability and energy use patterns, such an energy analysis provides an appropriate background from which China's leapfrogging potential can be evaluated. -- Der in China beginnende Motorisierungsprozess führt zwangsläufig zu einer Konfrontation mit den Umwelt- und Ressourcenkonflikten, die mit der erdölbasierten Automobiltech-nologie des vergangenen Jahrhunderts Hand in Hand gehen. Dadurch würde sich zum einen die gegenwärtig problematische Erdölenergiebilanz des Landes durch erhöhten CO2 Ausstoß verschärfen. Zum Anderen würde der Aufbau einer chinesischen automobilen Infrastruktur auf Erdölbasis, die Ressourcenknappheit in diesem Sektor, die globalen Umweltprobleme und die Sicherung der weltweiten Energiebilanz negativ beeinflussen. Eine realistische Alternative für China ist ein Quantensprung auf dem Gebiet der Auto-mobiltechnologie zu vollziehen und in Wasserstoffmotoren zu investieren. China kann mit einer Automobilwirtschaft auf der Basis einer Wasserstofftechnologie die durch Erdöl-verbrennung geschaffenen Umweltprobleme umgehen. Dieser Artikel untersucht das Potential Chinas zu einem solchen Quantensprung in der Automobiltechnologie. Ein wesentlicher Aspekt ist die Prüfung der Energiebilanz Chinas in den Jahren 1990-2000, die es ermöglicht den Energieverbrauch und die Produktion auf Quellenbasis internationaler Organisationen und wissenschaftlicher Arbeiten, zueinander in ein Verhältnis zu setzen. Die Energiebilanz der einzelnen Sektoren Atomkraft, Kohle, Erdöl und Erdgas wird analysiert und vergleichend werden die zukünftigen Trends prognostiziert. Für die Implementation von Wasserstofftech-nologie ist die Verfügbarkeit und Nutzung von Energieressourcen von zentraler Bedeutung. Eine Analyse der Energiebilanz ist daher die Grundlage für eine wissenschaftlich fundierte Einschätzung des Potentials Chinas zu einem solchen technologischen Quantensprung.

A dilating vortex particle method for compressible flow

Vortex methods have become useful tools for the computation of incompressible fluid flow. In this work, a vortex particle method for the simulation of unsteady two-dimensional compressible flow is developed. By decomposing the velocity into irrotational and solenoidal parts, and using particles that are able to change volume and that carry vorticity, dilatation, enthalpy, entropy and density, the equations of motion are satisfied. Spatial derivatives are treated using the method of particle strength exchange with high-order-accurate, non-dissipative kernels. The new vortex method is applied to co-rotating and leapfrogging vortices in compressible flow, with the far acoustic field computed using a two-dimensional Kirchhoff surface

Trade policy and leapfrogging.

The recent extensive study of vertical product differentiation models has allowed for the analysis of international trade issues in the presence of country asymmetries in terms of product qualities, technology, cost, market size and income. In the presence of such asymmetries, national industries will either be market leaders or lagging behind in the international market place in terms of their product qualities. The resulting asymmetry in profits creates powerful incentives for lagging industries as well as their national Governments to reverse this situation to their advantage, i.e., to induce "leapfrogging" in terms of product qualities. This paper presents an overview of existing research on leapfrogging as well as several new results and questions.Product qualities; International trade; Trade policy;

Leapfrogging potential for sustainable energy transition in Serbia

Purpose This paper aims to look at the dilemma of promoting sustainable energy transition in post-socialist countries while containing social and economic implications, focusing on the case of Serbia. The aim is to analyse Serbian energy status taking into account historical factors, to analyse barriers that are hindering transition and to identify leapfrogging potential for the sustainable energy development of the country. Design/methodology/approach Energy transition and leapfrogging potential have been qualified and quantified by indicators, the own calculations and policy analysis to identify barriers to sustainable energy. Findings The country has vast potential for leapfrogging in energy transition, yet continues the gradualist approach based on several policy barriers to the process. The analysis shows six barriers related to low energy price, high energy intensity, prioritization of energy security, inadequacy of utilization of renewable sources, lack of policy coherence and dependency on external funding. However, these barriers could be overcome with an energy policy emphasizing leapfrogging potential. As is pointed out in the conclusion, this should be based on the difference between EU-28 average indicators, discrepancy between use and availability of renewable energy, potential for regional cooperation in the energy sector and under-used skills and participation. Originality/value The paper discusses energy transition in its historical context, arguing that it has to be considered as comprehensively with societal implications and effects, thus creating useful knowledge for other post-socialist countries in current and future transitions.Peer reviewe