Innovation, Imitation and Intellectual Property Rights in Developing Countries.

This paper sets up a vertically related market model in which imitation and innovation are endogenously determined to study the impact of intellectual property rights ( IPR) protection on less-developed countries. It shows how a less-developed country switches from imitation to innovation as it develops. It is also found that the relationship between IPR protection and economic development is U-shaped. The IPR protection tends to go down and then go up as income rises. This finding also conforms with that in the empirical literature on IPR protection. [ABSTRACT FROM AUTHOR]