Product cycles among three regions with differential R&D abilities

I extend the North-South product cycle model of Grossman and Helpman [Grossman, G. and Helpman, E. (1991b), “Endogenous Product Cycles,” Economic Journal, 101, 1214-1229.] to a three-region model where the region Middle undertakes both innovating and imitating activities in a trading equilibrium. In contrast to Grossman and Helpman [Grossman, G. and Helpman, E. (1991b), “Endogenous Product Cycles,” Economic Journal, 101, 1214-1229.], I find that an expansion in the North's labor force or a rise in the productivity of the North's labor in the research sector incurs no effect on the rate of the South's imitation. Moreover, the long-run relative wage of a region can vary inversely with the size of that region.