INNOVATION, GROWTH AND INTELLECTUAL PROPERTY RIGHTS IN THE GLOBAL ECONOMY

This book is about the economic analysis of innovation, growth, intellectual property rights (IPRs) and the relationship among them, with an emphasis on the relevance to the global economy. This book aims to help the reader to understand these issues through the lens of rigorous economic analysis, and to use the models presented as a basis to carry out empirical work and build new models to answer new questions. First, there is an in-depth economic analysis of international policy coordination in IPRs among countries. The cross-border externalities that domestic protection of IPRs confers on foreign countries are a central feature of these analyses. The relationship between the North and the South is emphasized. The Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS) under the auspices of the World Trade Organization is analyzed in detail. In the context of an international product cycle, we analyze how IPRs in the South affects the rate of production transfer from the North to the South, the rate of innovation in the North and the relative wage of the South. Next, the book analyzes the role of IPRs in the context of closed economy innovation-driven endogenous growth models. Finally, several models of the microeconomics of IPRs and innovation are discussed. It is proved that the degree of IPRs protection that maximizes welfare is in general smaller than that which maximizes the rate of innovation. The economics of "international exhaustion" of IPRs and the law and economics of "domestic exhaustion" of IPRs are analyzed.

Edwin L-C Lai has been Professor Emeritus at the Hong Kong University of Science and Technology since 2023. From 2009 to 2023, he was Professor of Economics in HKUST, and was jointly appointed as Director of the Center for Economic Development and Professor in the Division of Public Policy. From 2007 to 2009, he was Senior Research Economist and Adviser at the Federal Reserve Bank of Dallas of the Federal Reserve System of the USA. Before that he was Assistant Professor at Vanderbilt University, Associate Professor at City University of Hong Kong and Associate Professor at Singapore Management University.

Professor Lai's main research areas are international economics, industrial organization, and growth. He is widely recognized in his study on the economic analysis of intellectual property rights protection in the global economy. He was named a 2024 Top Scholar (lifetime accomplishments) by ScholarGPS based on his strong publication record, the impact of his work, and the notable quality of his scholarly contributions, which together placed him in the top 0.5% of all scholars worldwide in the research area of "Intellectual Property". He has published in American Economic Review, RAND Journal of Economics, International Economic Review, Journal of International Economics and other leading journals in economics. He is the sole author of the book One Currency, Two Markets: China's Attempt to Internationalize the Renminbi, published in 2021 by Cambridge University Press. The Chinese edition of the book was published in April 2025 by Fudan University Press.

Professor Lai has been a consultant to the World Bank, visiting scholar/fellow/professor with Boston University, Princeton University, Kobe University, CESifo (University of Munich), Hitotsubashi University and Hong Kong Institute for Monetary Research. He was Associate Editor of Review of International Economics (Wiley Publisher) from 2013 to 2022. He is a member of the editorial board of Journal of International Trade Law and Policy (Emerald Publisher) and Advisory Editor of Journal of Industry, Competition and Trade (Springer Publisher). He is a Fellow of the CESifo Research Network (U of Munich) and a board member of Asia-Pacific Trade Seminars (APTS) Group. He received his B.Sc. in engineering from University of Hong Kong and AM and PhD in economics from Stanford University.