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Economic Growth with Imperfect Protection of Intellectual Property Rights

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Author Info
Ryo Horii (Osaka University)
Tatsuro Iwaisako (Ritsumeikan University)

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Abstract

The growth effects of intellectual property right (IPR) protection are examined in a quality-ladder model of endogenous growth. Stronger IPR protection, which reduces the probability of imitation, raises the reward for innovation. However, stronger protection reduces the number of competitive sectors, in which it is easier to innovate than in monopolistic sectors, thus concentrating researchers into fewer competitive sectors. As R&D projects take time until they are completed, concentration of R&D activity in a field raises the possibility of duplication of innovation, thereby hindering growth. In several settings, we show that imperfect, rather than perfect, protection maximizes growth.

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Paper provided by EconWPA in its series Development and Comp Systems with number 0508001.

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Length: 37 pages
Date of creation: 03 Aug 2005
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Handle: RePEc:wpa:wuwpdc:0508001

Note: Type of Document - pdf; pages: 37
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Related research
Keywords: intellectual property rights; endogenous growth; quality ladder; imitation; leapfrogging; duplication.;

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Find related papers by JEL classification:
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
O34 - Economic Development, Technological Change, and Growth - - Technological Change - - - Intellectual Property Rights
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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References listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Lutz Arnold & Christian Bauer, 2009. "On the growth and welfare effects of monopolistic distortions," Journal of Economics, Springer, vol. 97(1), pages 19-40, May. [Downloadable!] (restricted)
  2. Zoltan J. Acs & Mark Sanders, 2008. "Intellectual Property Rights and the Knowledge Spillover Theory of Entrepreneurship," Working Papers 08-23, Utrecht School of Economics. [Downloadable!]
    Other versions:
  3. Tapio Palokangas, 2008. "Competition and product cycles with non-diversifiable risk," Journal of Economics, Springer, vol. 94(1), pages 1-30, 06. [Downloadable!] (restricted)
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