Heterogeneity of Southern Countries and SouthernIntellectual Property Rights Policy

We develop a model with one innovating northern firm and heterogeneous southernfirms that compete in a final product market. We assume southern firms differ in their intrinsiccosts and their ability to adapt technology and study southern incentives to protect intellectualproperty rights. We find that in a non-cooperative equilibrium governments will resist IPRprotection, but collectively southern countries benefit from some protection. We show thatcountries with more efficient firms prefer higher collective IPR protection than those with lessefficient firms. However, given the aggregate level of IPR protection, it is more efficient if themore efficient countries have weaker IPR protection.[...]