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On Knowledge Diffusion, Patents Lifetime and Innovation Based Endogenous Growth

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  • Philippe Michel
  • Jules Nyssen

Abstract

This paper analyzes the macroeconomic effects of the patents system within the framework of an endogenous growth model with new products development. We assume that patents not only represent a commercial protection for innovators but also entail a partial property right on information. Therefore, increasing the patents lifetime increases the profitability of a given research and development project but also decreases the knowledge spillovers that play a crucial role in the growth process. We then show that when the instantaneous diffusion of knowledge is "low", growth is maximized by a finite patents lifetime while this role is devoted to infinitely lived patents are growth-maximizing when the instantaneous diffusion of knowledge is "high". Furthermore, in the former case, the optimal patents lifetime is also finite and shorter than the growth maximizing one. The design of an optimal patents policy only holds in a second best analysis. When the resource allocation is determined by a central planner maximizing the utility of a representative agent, social welfare is always higher than in the decentralized case.

Suggested Citation

  • Philippe Michel & Jules Nyssen, 1998. "On Knowledge Diffusion, Patents Lifetime and Innovation Based Endogenous Growth," Annals of Economics and Statistics, GENES, issue 49-50, pages 77-103.
    • Handle: RePEc:adr:anecst:y:1998:i:49-50:p:77-103
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    File URL: http://www.jstor.org/stable/20076111
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    Cited by:

    1. Mabrouki, Mohamed, 2017. "Brevet d’invention et croissance économique : une analyse dans le cadre de l’économie tunisienne durant la période 1970 - 2010 [Patent of invention and economic growth: an analysis within the frame," MPRA Paper 80485, University Library of Munich, Germany.
    2. Gangopadhyay, Kausik & Mondal, Debasis, 2012. "Does stronger protection of intellectual property stimulate innovation?," Economics Letters, Elsevier, vol. 116(1), pages 80-82.
    3. Ryo Horii & Tatsuro Iwaisako, 2007. "Economic Growth with Imperfect Protection of Intellectual Property Rights," Journal of Economics, Springer, vol. 90(1), pages 45-85, January.
    4. repec:prg:jnlpep:v:preprint:id:644:p:1-19 is not listed on IDEAS
    5. Laussel, Didier & Nyssen, Jules, 1999. "Endogenous growth and multiplicity due to finite patents' lifetime," Economics Letters, Elsevier, vol. 63(2), pages 167-173, May.
    6. Boucekkine, Raouf & de la Croix, David, 2003. "Information technologies, embodiment and growth," Journal of Economic Dynamics and Control, Elsevier, vol. 27(11), pages 2007-2034.
    7. Tatsuro Iwaisako & Koichi Futagami, 2013. "Patent protection, capital accumulation, and economic growth," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 52(2), pages 631-668, March.
    8. Gilles Koléda, 2004. "Patents' novelty requirement and endogenous growth," Revue d'économie politique, Dalloz, vol. 114(2), pages 201-221.
    9. Mohamed MABROUKI, 2018. "Determination Of Optimal Patent Length In Favor Of Innovation And Growth," Journal of Smart Economic Growth, , vol. 3(1), pages 57-75, Juin.
    10. Tomáš Evan & Pavla Vozárová & Ilya Bolotov, 2018. "Some Effects of Intellectual Property Protection on National Economies: Theoretical and Econometric Study," Prague Economic Papers, Prague University of Economics and Business, vol. 2018(1), pages 73-91.
    11. Christian Kiedaisch, 2021. "Growth and welfare effects of intellectual property rights when consumers differ in income," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(4), pages 1121-1170, November.
    12. Mohamed MABROUKI, 2018. "What Kind Of Intellectual Propfrty Regime Is More Favorable To Innovation: With Or Without A Patent?," Journal of Smart Economic Growth, , vol. 3(1), pages 77-95, Juin.
    13. MABROUKI, Mohamed, 2017. "Le brevet instrument de politique économique pour promouvoir l’innovation au profit de la croissance : discussion théorique [The patent economic policy instrument to promote innovation for growth: ," MPRA Paper 80317, University Library of Munich, Germany.
    14. Mabrouki, Mohamed, 2018. "Le brevet : un instrument efficace pour promouvoir l’innovation au profit de la croissance ou un mal nécessaire ? [Patent: an effective instrument to promote innovation for the benefit of growth or," MPRA Paper 85752, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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