International trade theory essays on intellectual property rights, wage differentials, countertrade, and customs unions

This work examines four aspects of international trade policy theory. Chapter 1 studies the South's incentive to protect the intellectual property rights of Northern firms, and the welfare consequences of the South's decision. A Northern producer and a Southern producer compete in an integrated world market. Only the Northern firm can conduct cost reducing R&D; the Southern firm can imitate costlessly if intellectual property rights are unprotected in the South. We find that the interests of the North and South generally conflict, and that a strong system of intellectual property rights may or may not enhance world efficiency.; Chapter 2 questions the desirability of policies designed to counteract the distorting nature of an equilibrium rural-urban wage gap in a small open two sector economy. I use a dual labor market model with an efficiency wage in the urban sector to analyze the impacts on welfare of an urban wage subsidy, an urban production subsidy, and a tariff on the urban product when urban unemployment is both present and absent. I find that with no unemployment, a wage or production subsidy is superior to a tariff. With unemployment, redistribution effects may limit the viability of intervention.; Chapter 3 considers countertrade as a means of committing to observable forward contracts. I analyze a two stage model with Cournot competition among three firms in the second stage. The number of firms countertrading in equilibrium depends on the transactions cost of countertrade. World efficiency is enhanced by countertrade for low transactions costs. A two firm model shows that cost asymmetries between firms can identify equilibrium countertraders.; Chapter 4 examines how customs unions affect foreign direct investment decisions using a two firm, three country model. Given each of three customs union regimes, firms choose where to locate production and governments choose tax policies prior to product competition in a third country differentiated product market. Both Cournot and Bertrand competition are considered. I find that producer-producer customs unions tend to discourage firms from locating abroad, while producer-consumer customs unions tend to encourage member firms to locate abroad and to discourage nonmember firms from locating abroad.