Incomplete Appropriability of R&D and the Role of Strategies and Cultural Factors in International Trade: A Japanese Case / Ryuzo Sato, Rama Ramachandran, Shunichi Tsutsui.

By:

Sato, Ryuzo

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w3797.Publication details: Cambridge, Mass. National Bureau of Economic Research 1991.Description: 1 online resource: illustrations (black and white)Subject(s):

E - Macroeconomics and Monetary Economics

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Abstract: One of the proudest achievements of classical and neoclassical economics is the derivation of the superiority of free trade. This result is obtained by assuming constant returns to scale, perfect competition and absence of externalities. The recent realization that the incomplete appropriability of R&D is a main source of externalities and hence the effect of R&D on national welfare is potentially subject to strategic manipulations necessitates a careful examination of these assumptions. This paper discusses R&D and diffusion of technology in international trade from two different perspectives. In Section II, we consider the role of cultural, social and historical factors in the appropriation of technology by reviewing how Japan has appropriated foreign technology. In Section III, we survey three strategic trade models to obtain some insights into the role of R&D and diffusion of technology in the context of imperfect competition. The issues we discuss include the effectiveness of R&D polices by a national government and the impact of R&D policies and diffusion of technology on the incentive to do R&D and on the outcome of trade.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w3797 (Browse shelf(Opens below))	Not For Loan

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August 1991.

One of the proudest achievements of classical and neoclassical economics is the derivation of the superiority of free trade. This result is obtained by assuming constant returns to scale, perfect competition and absence of externalities. The recent realization that the incomplete appropriability of R&D is a main source of externalities and hence the effect of R&D on national welfare is potentially subject to strategic manipulations necessitates a careful examination of these assumptions. This paper discusses R&D and diffusion of technology in international trade from two different perspectives. In Section II, we consider the role of cultural, social and historical factors in the appropriation of technology by reviewing how Japan has appropriated foreign technology. In Section III, we survey three strategic trade models to obtain some insights into the role of R&D and diffusion of technology in the context of imperfect competition. The issues we discuss include the effectiveness of R&D polices by a national government and the impact of R&D policies and diffusion of technology on the incentive to do R&D and on the outcome of trade.