During the past decade, a variety of intermediaries have emerged to facilitate the trading of patents: brokers, non-practicing entities (NPEs), defensive aggregators, online platforms, auctions and unique entities such as Intellectual Ventures. We discuss the fundamental causes for the lack of liquidity in the IP market and analyze the merits and shortcomings of the various business models used by patent intermediaries. A key conclusion is that platform-type intermediaries (who facilitate transactions without taking possession of assets) have struggled, whereas merchant-type intermediaries (who acquire patents and seek to monetize them directly) have reached significant scale and influence in the technology industries that fall under the incidence of their assets. We also discuss some efficiency issues raised by the growing prominence of patent merchants.
We study patterns of FDI in a multi-country world economy. First, we present evidence for a broad sample of countries that firms direct FDI disproportionately to markets with income levels similar to their home market. Then we develop a model featuring non-homothetic preferences for quality and monopolistic competition in which specialization is purely demand-driven and the decision to serve foreign countries via exports or FDI depends on a proximity-concentration trade-off. We characterize the joint patterns of trade and FDI when countries differ in income distribution and size and show that FDI is more likely to occur between countries with similar per capita income levels. The model predicts a Linder Hypothesis for FDI, consistent with the patterns found in the data.
Co-author Gene Grossman is a professor of economics at Princeton University. Co-author Pablo Fajgelbaum is an assistant professor of economics at the University of California, LA.
Working Paper 17550, National Bureau of Economic Research, October 2011.
Download PDFUsing the most comprehensive data file ever compiled on air pollution, water pollution, environmental regulations, and infant mortality from a developing country, the paper examines the effectiveness of India’s environmental regulations. The air pollution regulations were effective at reducing ambient concentrations of particulate matter, sulfur dioxide, and nitrogen dioxide. The most successful air pollution regulation is associated with a modest and statistically insignificant decline in infant mortality. However, the water pollution regulations had no observable effect. Overall, these results contradict the conventional wisdom that environmental quality is a deterministic function of income and underscore the role of institutions and politics.
Novelists have a better track record than economists at foretelling the future. Consider then Gary Shteyngart’s timely comic novel Super Sad True Love Story (Random House, 2010), which provides a rather graphic vision of what lies in store for the world economy. The novel takes place in the near future and is set against the backdrop of a United States that lies in economic and political ruin. The country’s bankrupt economy is ruled with a firm hand by the IMF from its new Parthenon-shaped headquarters in Singapore. China and sovereign wealth funds have parceled America’s most desirable real estate among themselves. Poor people are designated as LNWI (“low net worth individuals”) and are being pushed into ghettoes. Even skilled Americans are desperate to acquire residency status in foreign lands. This is sheer fantasy of course, but one that seems to resonate well with the collective mood. A future in which the US and other advanced economies are forced to play second fiddle to the dynamic emerging economies in Asia and elsewhere is rapidly becoming cliché. This vision is based in part on the very rapid pace of economic growth that emerging and developing economies experienced in the run-up to the global financial crisis of 2008-2009. Latin America benefited from a pace of economic development that it had not experienced since the 1970s, and Africa began to close the gap with the advanced countries for the first time since countries in the continent received their independence. Even though most of these countries were hit badly by the crisis, their recovery has also been swift. Optimism on developing countries is matched by pessimism on the rich country front. The United States and Europe have emerged from the crisis with debilitating challenges. They need to address a crushing debt burden and its unpleasant implications for fiscal and monetary policy. They also need to replace growth models which were based in many instances on finance, real estate, and unsustainable levels of borrowing. Japan has long ceased to exhibit any growth dynamism. And the eurozone’s future remains highly uncertain—with the economic and political ramifications of its unraveling looking nothing less than scary. In such an environment, rapid growth in the developing world is the only thing that could propel the world economy forward and generate increasing demand for rich-country goods and services—the only silver lining in an otherwise dreary future. The question I address in this paper is whether this gap in performance between the developed and developing worlds can continue, and in particular, whether developing nations can sustain the rapid growth they have experienced of late. I will not have anything to say on the prospects for the advanced economies themselves, assuming, along with conventional wisdom, that their growth will remain sluggish at best. My focus is squarely on the developing and emerging countries and on the likelihood of continued convergence.
Does democratic governance expand wealth and prosperity? There is no consensus about this issue despite the fact that for more than half a century, rival theories about the regime-growth relationship have been repeatedly tested against the empirical evidence, using a variety of cases, models and techniques. To consider the issues, Part I of this paper reviews and summarizes theories why regimes are expected to influence economic growth directly, either positively or negatively. After considering these debates, Part II discusses the technical challenges facing research on this topic and how it is proposed to overcome these. Part III presents the results of the comparative analysis for the effects of democratic governance on economic growth during recent decades. The descriptive results illustrate the main relationships. The multivariate models check whether these patterns remain significant after controlling for many other factors associated with growth, including geography, economic conditions, social structural variables, cultural legacies, and global trends. The evidence supports the equilibrium thesis suggesting that regimes combining both liberal democracy and bureaucratic governance are most likely to generate growth, while by contrast patronage autocracies display the worst economic performance. The conclusion considers the implications.
Most social scientists would like to believe that their profession contributes to solving pressing global problems. There is today no shortage of global problems that social scientists should study in depth: ethnic and religious conflict within and between states, the challenge of economic development, terrorism, the management of a fragile world economy, climate change and other forms of environmental degradation, the origins and impact of great power rivalries, the spread of weapons of mass destruction, just to mention a few. In this complex and contentious world, one might think that academic expertise about global affairs would be a highly valued commodity. One might also expect scholars of international relations to play a prominent role in public debates about foreign policy, along with government officials, business interests, representatives of special interest groups, and other concerned citizens. Yet the precise role that academic scholars of international affairs should play is not easy to specify. Indeed, there appear to be two conflicting ways of thinking about this matter. On the one hand, there is a widespread sense that academic research on global affairs is of declining practical value, either as a guide to policymakers or as part of broader public discourse about world affairs. On the other hand, closer engagement with the policy world and more explicit efforts at public outreach are not without their own pitfalls. Scholars who enter government service or participate in policy debates may believe that they are "speaking truth to power," but they run the risk of being corrupted or co-opted in subtle and not-so-subtle ways by the same individuals and institutions that they initially hoped to sway. The remainder of this essay explores these themes in greater detail.
KS Faculty Research Working Paper Series RWP11-030, John F. Kennedy School of Government, Harvard University.Download PDF In recent decades Socially Responsible Investment (SRI) emerged into an en vogue investment philosophy. Originating from religious and moral considerations, SRI evolved in the wake of socio-political deficiencies and corporate social conduct. In the global rise of financial social conscientiousness, differing national legislations and regulatory traditions have led to various SRI practices, which are harmonized by the United Nations (UN). Building on the historic advancement of Financial Social Responsibility in the wake of socio-ethical deficiencies, this paper highlights the future potential of SRI in the aftermath of the 2008/09 World Financial Crisis as a means to avert economic market downfalls. During the current financial market reform, additional micro- and macro-research on financial social conduct could foster the idea of Financial Social Responsibility and aid a successful implementation of SRI.
Julia Puaschunder is a faculty associate at the Center for the Environment at Harvard University.
Download PDF