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Effects of Intellectual Property Rights Protection and Integration on Economic Growth and Welfare

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  • Chung-Hui Lai

    (Department of International Business, Central Taiwan University of Science and Technology, Taiwan
    Department of Accounting, Feng Chia University, Taiwan)

Abstract

The protection of intellectual property rights (IPR) and the distribution of rent are central issues in R&D-based growth models with the return to innovation serving as the engine of growth. In this paper we consider the strength of the intellectual property rights and franchise bargaining system to analyze how the rent/franchise fee and institutional quality affect the economic growth and social welfare. It is found that the intermediate goods firm with imperfect IPR protection charges less than the marginal cost. In addition, increasing the IPR protection will increase the rent/franchise fee. We also show that the growth-maximizing effects of IPR protection, the bargaining power of intermediate goods firms, and the imitation of technology are no longer equivalent to those effects on welfare maximization since the welfare result depends on the relative degrees of the growth enhancing effect and crowding-out effect on consumption.

Suggested Citation

  • Chung-Hui Lai, 2015. "Effects of Intellectual Property Rights Protection and Integration on Economic Growth and Welfare," Journal of Economics and Management, College of Business, Feng Chia University, Taiwan, vol. 11(2), pages 143-162, July.
    • Handle: RePEc:jec:journl:v:11:y:2015:i:2:p:143-162
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    References listed on IDEAS

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    More about this item

    Keywords

    IPR; R&D; bargaining; endogenous growth; social welfare;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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