The quest for technological leadership has caused the widespread use of intellectual property protection (IPP) as an instrument of national technology policies. Even the Agreement on Trade-Related Intellectual Property Rights (TRIPs) can be interpreted as an attempt to hinder the international...

We study the incentives that governments have to protect intellectual property in a trading world economy. We consider a world economy with ongoing innovation in two countries that differ in market size and in their capacities for innovation. We associate the strength of IPR protection with the...