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Effects of a blocking patent on R&D with endogenous survival activities

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  • Sumiko Niwa

    (Japan Society for the Promotion of Science
    Osaka University)

Abstract

This study analyzes the effect of strengthening patent protection for innovation and economic growth by introducing a blocking patent into the endogenous growth model developed by Furukawa (Econ Lett 121(1):26–29, 2013a), which features survival activity of patent holders in the R&D sector with a variety-expansion model. Results show that strengthening patent protection can raise the economic growth rate and social welfare through an endogenous survival investment. Additionally, this study examines the effects of increasing subsidies for R&D. We find that increasing R&D subsidy rate can negatively affect economic growth and social welfare because of the investment for survival activities. This result shows the novel role of a blocking patent in determining innovation effects of R&D subsidies. Furthermore, we analyze the effect of patent breadth which is another patent instrument in this model on innovation and economic growth. Results show that the growth and welfare effects of the profit-division rule and the subsidy rate for R&D may vary with the size of patent breadth.

Suggested Citation

  • Sumiko Niwa, 2018. "Effects of a blocking patent on R&D with endogenous survival activities," Journal of Economics, Springer, vol. 125(3), pages 263-277, November.
    • Handle: RePEc:kap:jeczfn:v:125:y:2018:i:3:d:10.1007_s00712-018-0617-1
    DOI: 10.1007/s00712-018-0617-1
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    References listed on IDEAS

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    Cited by:

    1. Ben Yedder, Nadia & El Weriemmi, Malek & Bakari, Sayef, 2023. "The nexus between domestic investment and economic growth in MENA countries; Do Patents matter?," MPRA Paper 118174, University Library of Munich, Germany.
    2. Hu, Mei-Ying & Lu, You-Xun & Lai, Ching-chong, 2023. "Patent term extensions and commercialization lags in the pharmaceutical industry: A growth-theoretic analysis," Journal of Macroeconomics, Elsevier, vol. 76(C).
    3. Kishimoto, Shin & Suzuki, Keishun, 2021. "Growth and Welfare Effects of Interventions in Patent Licensing Negotiations," MPRA Paper 108009, University Library of Munich, Germany.
    4. FURUKAWA Yuichi & Tat-kei LAI & SATO Kenji, 2018. "Novelty-Seeking Traits and Innovation," Discussion papers 18073, Research Institute of Economy, Trade and Industry (RIETI).
    5. Furukawa, Yuichi & Lai, Tat-kei & Sato, Kenji, 2019. "Love of Novelty: A Source of Innovation-Based Growth... or Underdevelopment Traps?," MPRA Paper 92915, University Library of Munich, Germany.
    6. Klein, Michael A., 2022. "The reward and contract theories of patents in a model of endogenous growth," European Economic Review, Elsevier, vol. 147(C).
    7. Lu, You-Xun, 2022. "Interactive effects of monetary policy and patent protection: The role of endogenous innovation size," Economic Modelling, Elsevier, vol. 113(C).
    8. Angus C. Chu, 2022. "Patent policy and economic growth: A survey," Manchester School, University of Manchester, vol. 90(2), pages 237-254, March.
    9. Chao Liu & Guanjun Xia, 2018. "Research on the Dynamic Interrelationship among R&D Investment, Technological Innovation, and Economic Growth in China," Sustainability, MDPI, vol. 10(11), pages 1-19, November.
    10. You-Xun Lu & Ching-Chong Lai & Po-Yang Yu, 2024. "Effects of patent policy on growth and inequality: exogenous versus endogenous quality improvements," Journal of Economics, Springer, vol. 141(1), pages 1-28, January.

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    More about this item

    Keywords

    Intellectual property rights; Blocking patents; Endogenous growth; Firm survival;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • 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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