Legal Enforcement against Illegal Imitation in Developing Countries

This paper investigates the effect of seizing illegal imitations within developing countries on imitation, innovation, and economic growth. The model shows four main results. First, a higher seizure rate does not always decrease imitative activity in the South because it may encourage the infringer to commit repeated offenses. Second, the model shows a U-shaped relationship between innovation and the strengthening seizure rate. Third, numerical analysis indicates that a sufficiently high seizure rate that is larger than a critical value is required to enhance economic growth. Finally, unlike seizure, the extended model shows that a prohibition on importing Southern illegal imitations in the North necessarily lowers imitative activities.