Haibin Wu

Distance to frontier, intellectual property rights, and economic growth

This article examines the effects of intellectual property rights (IPR) protection on growth and convergence. Firms in a country undertake both innovation and imitation to improve their productivity. IPR protection reduces the cost of innovation, but makes imitation more costly. Countries at early stages of growth adopt a strategy of high effort on imitation, and switch to the strategy of high effort on innovation at some point. A higher degree of IPR protection makes the switch to the strategy of high effort on innovation earlier. There are two possible growth traps. A middle-income trap arises when a country fails to switch to high effort on innovation due to a low degree of IPR protection. Whereas a poverty trap may exist at the early stage of development, when there is no enough effort on imitation due to a strict IPR protection.

Entry barriers and markup ratios: evidence from OECD countries

This article examines the effects of industrial natural entry barrier and country entry regulation on industrial markups for 13 OECD countries. We find that markup ratios are high in industries with high natural entry barrier and in countries with high-entry regulation. In addition, markups are high in high natural entry barrier industries in high-entry regulation countries. However, all these effects are not significant, thus implying that entry barrier may not have a strong effect on the market power or profitability.

Entry regulation and international trade

ABSTRACT We use cross-country, cross-industry data to analyse the relationship between entry regulation and international trade. We find robust evidence that entry regulation discourages exports of industries with low natural barriers to entry. This implies that, in international markets, countries with heavy entry regulation have a comparative disadvantage in industries that are technologically easy to enter. Further analysis shows that the result is partly due to the negative impact of entry regulation on productivity.

Does Entrepreneurship Promote Growth? A Model of Occupational Choice with Risk-Attitude Heterogeneous Agents

This paper studies whether promoting entrepreneurship is always growth-enhancing under a dynamic general-equilibrium framework in which agents differ in their risk attitude. Less risk averse agents become entrepreneurs who contribute to economic growth through a product variety effect. Workers, who are net savers, also contribute to growth through a loanable fund supply effect. The working of these two effects results in a non-monotone entrepreneurship-economic growth relationship. Due to risk aversion and the presence of an intergenerational externality, both of the two effects are under-valued by individuals. As a result, there can be too less or too much entrepreneurship in the decentralized equilibrium. Although having some of the entrepreneurial risk insured away can be growth-enhancing, it is never optimal to provide full insurance. How changes in the distribution of risk attitude and the degree of uncertainty may affect occupational choice and balanced growth are also examined.