Intellectual property, research intensity, and scale effect

This study revisits a multi-country Ricardian model with a continuum of goods by incorporating the “standing-on-shoulder” and “stepping-on-toes” effects into technology-accumulated formation to allow externalities of both knowledge spillovers and duplication of research efforts. Being more in harmony with real practice, and even though all the merits of the trade model remain valid, this study demonstrates the scale effect in research intensity: the larger a country is, the greater the country's research intensity is.