Absorptive Capability and Policy Choices on Intellectual Property Rights in Developing Countries

Based on the endogenous growth model with expanding-variety of intermediates, this article studies the effects of intellectual property rights protection, technology gap and absorptive capability on the technology progress in developing countries. It is shown that the relationship between intellectual property rights protection and technology progress in developing countries is non-monotonically. When absorptive capability is above the threshold, a weaker intellectual property rights protection policy will exert positive effects on developing countries´ technology progress. Moreover, looser intellectual property rights protection policy may no longer promote technology progress as technology gap getting smaller.