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Intra-Sector and Inter-Sector Competition in a Model of Growth

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  • Marco Di Cintio

Abstract

The role of patents is threefold: first, they are important to state the property rights of an invention; second, they are necessary to secure financing for starting a new venture; third, they are fundamental to recoup R&D investments. Noting the imperfections of the patent legal system, the market has two potential levels of competition under different structures: the inter-sector monopolistic competition and the intra-sector Cournot oligopoly. Considering the sectorial market share as the indicator of patent system enforcement, the author finds that growth takes place, if and only if, there are some property rights of private knowledge produced by R&D activities. In turn, the enforcement of patent system translates into a low degree of competition among firms. Its influence on the growth rate goes in a single unambiguous direction. As competition rises, few resources are available for R&D, so the growth rate goes down.

Suggested Citation

  • Marco Di Cintio, 2015. "Intra-Sector and Inter-Sector Competition in a Model of Growth," STUDI ECONOMICI, FrancoAngeli Editore, vol. 2015(116), pages 74-89.
    • Handle: RePEc:fan:steste:v:html10.3280/ste2015-116003
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    More about this item

    JEL classification:

    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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