This paper examines the relationship between the credit constraints faced by a firm and the unit value prices of its exports. The paper modifies Arkolakis’s (2010) model of trade with heterogeneous firms by introducing endogenous quality and credit constraints. The model predicts that tighter...

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. After describing the determination of national patent...

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, in their capacities for innovation, and in their absolute and comparative advantage in...

We derive a simple equation to calculate the global welfare impact of the simultaneous reduction of trade costs between multiple country-pairs. Interestingly, we find that we obtain the same equation for a broad class of trade models. Moreover, balanced trade is mostly not required for the...

We show that under a two-party political system the party in office tends to be present-biased and time-inconsistent. This may lead to inefficient procrastination of socially beneficial projects. However, procrastination needs not be indefinite. There exist equilibria in which the project is...

In this paper, we test the empirical implications of Grossman and Lai's (2004) game-theoretic model of international patent protection. The model yields clear predictions of the variation in degrees of patent protection across countries based on the market sizes and levels of innovative...

The doctrine of patent exhaustion implies that the authorized sale of patented goods “exhausts” the patent rights in the goods sold and precludes additional license fees from downstream buyers. Courts have considered absolute exhaustion, in which the patent owner forfeits all rights upon an...

The author considers an environment with two firms, one domestically owned and one a foreign-owned multinational corporation (MNC), both producing in the host (domestic) country. It is found that there are three distinct dimensions that affect a country's strategic policy towards...

This study examines the impacts of two prevalent types of patent promotion policies (reward and subsidy policies) by constructing a tractable general equilibrium model to examine the effectiveness of patent promotion policies in promoting research activities as well as the production of...