Economic Analysis of Technology in the Global Economy (Summary)

This workshop was held to share the outcomes of the project "Economic Analysis of Technology in the Global Economy " (leader: ISHIKAWA Jota, FF & Hitotsubashi University). Project members—ICHIDA Toshihiro (Waseda University), OKUBO Toshihiro (Keio University), OHNO Yuka (Hokkaido University), TAKECHI Kazutaka (Hosei University), NAITO Takumi (Waseda University), MUKUNOKI Hiroshi (Gakushuin University), and ISHIKAWA Jota—and an invited speaker, Keith MASKUS (University of Colorado), presented their papers.

Eight papers were discussed in the workshop "Economic Analysis of Technology in the Global Economy" held on January 28, 2013.

NAITO Takumi presented "An Eaton-Kortum Model of Trade and Growth ," which is RIETI Discussion Paper Series 12-E-055. This paper combines the Eaton-Kortum model with a multi-country AK model to examine how trade liberalization affects countries' growth rates and extensive margins trade over time. It is shown that the long-run effects of trade liberalization are quite different from the short-run effects.

MUKUNOKI Hiroshi introduced "Market Access and Technology Adoption in the Presence of FDI." This paper investigates whether improved access to the domestic market accelerates the speed with which a foreign firm adopts new technology. The timing is different between cases involving a single foreign firm and those involving multiple foreign firms. This may imply important policy implications.

OKUBO Toshihiro delivered "Greenhouse-gas Emission Controls and International Carbon Leakage through Trade Liberalization." In the framework of the new economic geography, the effects of greenhouse-gas controls (emission taxes, emission quotas, and emission standards) are examined in a North-South model. In particular, it is shown that emission taxes lead to the largest carbon leakage.

OHNO Yuka presented "Patented Technology, Product Development, and Infringement Lawsuit." In a dynamic framework, she analyzes the timing of infringement lawsuits. When a patent is strong (i.e., likely to be valid), an infringement lawsuit is likely to take place sooner, and, vice versa, when a patent is weak, an infringement lawsuit takes place later.

TAKECHI Kazutaka discussed "The Price of Distance: Producer heterogeneity, pricing to market, and geographic barriers." This paper explores the effect of distance on price differentials across regions. Incorporating producer heterogeneity and pricing to the market, empirical analysis using micro-data reveals that the distance effect is significantly large.

ISHIKAWA Jota explored "Trade and Industrial Policy Subtleties with International Licensing." It is pointed out that under an international duopoly between a domestic firm and a foreign firm, the presence of international licensing may reverse optimal policies from subsidies to taxes or taxes from subsidies.

ICHIDA Toshihiro conferred "Imitation Versus Innovation Costs: Patent policy under common patent length." He studies the interaction between innovation and imitation costs for heterogeneous industries. He also investigates polices that strengthen trade secrets such as the Soleau envelop policy.

Keith MASKUS presented "The Impact of Post-TRIPS Patent Reforms on export the Structure of Export." The paper finds that a country with stronger patent protections tends to have greater exports to the United States in patent-intensive sectors. These effects are considerably larger in the post-TRIPS era.