This paper analyzes the effect of imitation on the rate of technological progress in an endogenous growth model. Quality leaders protect themselves from imitation by secondary development, which increases technological progress. Nevertheless, lower intellectual property rights protection reduces the incentives to enter the research sector, which lowers innovation by outsiders. Simulations show ...

This paper develops a model of technology transfer in an environment where Þrms in developing countries are unable to recover the costs of imitation and adaptation, because a competitive market structure in the South rules out any monopoly rents accruing to Southern Þrms. In such an environment, the technology transfer must be initiated by a Northern Þrm which risks its technology being copied ...