Publication
The Korean Economic Review
Linkages Between Patent Protection and Strategic R&D Policy: Case of the Exogenous Regime of IPR Pro
Moonsung KangYear 2008Vol. 24No. 2
Abstract
This paper explores strategic R&D policy when countries’ regimes on protection of intellectual property rights (IPR) are exogenously given under the multilaterally agreed disciplines. Under the weak enforcement regime, domestic and foreign R&D activities are strategic complements rather thanstrategic substitutes and hence R&D reaction curves are upward sloping. Government wishes to subsidize its domestic firm’s R&D in the presence of sufficiently weak IPR protection, because it is able to encourage R&D by the foreign rival firm, and greater R&D investment of foreign rivals increasesthe profits of the domestic firm.