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Technology diffusion, innovation size, and patent policy

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  • Kishi, Keiichi

Abstract

We develop a Schumpeterian growth model based on technology diffusion and innovation, whereby the distribution of the innovation size is endogenously determined. Firms improve the targeted products by randomly combining existing technologies owned by other firms. Furthermore, the firms contribute to the adoption of newly developed frontier technology. The innovators must attain the minimum innovation size required for a patent. That is, the patent office grants patents only for superior innovations. We show that an increase in the minimum innovation size may reduce the average patentable innovation size because of an endogenous response of the distribution of innovation size. This implies that even if the patent office requires superior innovations in order to assign patents, innovators tend to produce inferior patentable innovations on average.

Suggested Citation

  • Kishi, Keiichi, 2019. "Technology diffusion, innovation size, and patent policy," European Economic Review, Elsevier, vol. 118(C), pages 382-410.
    • Handle: RePEc:eee:eecrev:v:118:y:2019:i:c:p:382-410
    DOI: 10.1016/j.euroecorev.2019.05.012
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    Cited by:

    1. Klein, Michael A., 2022. "The reward and contract theories of patents in a model of endogenous growth," European Economic Review, Elsevier, vol. 147(C).
    2. Kishi, Keiichi & Okada, Keisuke, 2021. "The impact of trade liberalization on productivity distribution under the presence of technology diffusion and innovation," Journal of International Economics, Elsevier, vol. 128(C).

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    More about this item

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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