Policy Instruments, Patents, and International Technology Diffusion in a North-South Duopoly

ABSTRACT

This article analyzes the relationship between policy instruments and technology diffusion in a North-South duopoly within an inter-temporal model. The North benefits from a monopoly period with a new technology. At the end, there is then technology diffusion from the North to the South. The Northern firm files a patent in order to slow down the diffusion. This article studies the impact of several policy instruments. The results show that the Northern government’s policy instruments slow down technology diffusion, except for an import quota. The Southern government’s policy instruments accelerate the new technology diffusion.

KEYWORDS:

• Technology diffusion
• patent
• policy instruments

Notes

¹ The main results of this article hold under Bertrand competition. The Bertrand equilibrium is presented in a LAREFI Working Paper version: http://lare-efi.u-bordeaux4.fr/IMG/pdf/cr15-efi02.pdf.

² We study whether or not results hold under general forms for inverse demand functions in the same LAREFI Working Paper version.

³ Subscripts denote partial derivatives for .

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