Why are some uncompetitive industry sectors so effective in lobbying for greater protection and support? This paper attempts to explain the lobbying success of these industries in terms of the strategic role of investment in technology as a credible commitment device. By eschewing potentially profitable investment opportunities firms credibly signal to the government that the cost of a tariff r...

We investigate empirically how the Japanese patent system has affected postwar growth in Japanese total factor productivity. The system has been criticized for several reasons, including that it encourages numerous filings of narrow claims that build incrementally on fundamental technologies developed by domestic and foreign inventors. Stated in different terms, the system was designed to promo...

This paper challenges the conventional wisdom that exclusive owners of an advanced technology are always better off when producing as a monopolist than when competing against another firm. Competition against a less efficient firm weakens the power that a host country can exert on the incumbent in the form of its tariff policy. We show that this gives a motive for a monopolist to license its te...

The empirical relationship between trade protection and economic growth is surprisingly fragile, as shown in a number of other papers. After demonstrating this empirical sensitivity, we address one possible explanation for these findings: that the relationship is nonlinear. Following the endogenous growth literature, we test for the possibility that the relationship between trade barriers and g...

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 capacity for innovation. After describing the determination of national patent policies in a noncooperative regime of patent protection, we ask, “Why is intellectual property better...

I consider the implications of recent research for R&D policy in developing countries. Typical new growth models, which assume free entry and no strategic behaviour by R&D producers, are less appropriate for policy guidance than strategic oligopoly models. But the latter have ambiguous implications for targeted R&D subsidies, and caution against the anti-competitive effects of research joint ve...

A two-count ry, twōrm model has been developed to study equilibrium lobbying posit ions in intra-industry trade under cost uncertainty. A ̄rm chooses either a protect ionist posit ion or a free-t rader posit ion. The model predicts that taking the free-t rader (protect ionist) lobbying posit ion is an e± cient (ine± cient) ̄rm's dominant strategy. In addit ion, for any lobbying posit ion taken ...

What is the appropriate degree of centralization in the context of industrial policy? The basic advantage of centralization results from internalization of external e ects. While most of the literature stresses the superior information of regional authorities as a countervailing force, the present paper discusses another argument in favor of decentralization: Delegation of authority to regional...

We examine interaction between goods trade and market power in domestic trade and distribution sectors. Theory suggests a linkage between service-sector competition and goods trade, one supported by econometrics involving imports of 22 OECD countries vis-à-vis 69 exporters. This points to linkages between market access conditions for goods and the structure of the service sector. Competition in...

We are concerned with trade in transport services (not cabotage but rather international shipping, transport, and related logistical services) and the importance of competition and market structure in the sector. We examine implications of liberalization for profits, trade, and national gains from trade. Though past GATS maritime negotiations involved the maritime nations, we also flag interest...