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Growth Effects of Non-Proprietary Innovation

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  • Saint-Paul, Gilles

Abstract

We study and endogenous growth model where a profit-motivated R&D sector coexists with the introduction of free blueprints invented by philanthropists. These goods are priced at marginal cost, contrary to proprietary ones, which are produced by a monopoly owned by the inventor. We show that philanthropy does not necessarily increase long-run growth and that it may even reduce welfare. The reason is that it crowds our proprietary innovation, which on net may reduce total innovation in the long run. These effects would be reinforced if philanthropical inventors sometimes came out with another version of an existing proprietary good. Dynamics can also be characterized and it is shown that the impact effect of free inventions on growth is positive.

Suggested Citation

  • Saint-Paul, Gilles, 2001. "Growth Effects of Non-Proprietary Innovation," CEPR Discussion Papers 3069, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:3069
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    Cited by:

    1. Engelhardt, Sebastian v. & Freytag, Andreas, 2013. "Institutions, culture, and open source," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 90-110.
    2. Lukach, R. & Plasmans, J.E.J., 2002. "Measuring Knowledge Spillovers using Patent Citations : Evidence from the Belgian Firm's Data," Other publications TiSEM d78bf59a-e0ff-4451-86b9-1, Tilburg University, School of Economics and Management.
    3. Alireza Naghavi & Chiara Strozzi, 2011. "Intellectual Property Rights, Migration, and Diaspora," Working Papers 2011.60, Fondazione Eni Enrico Mattei.
    4. Josh Lerner & Jean Tirole, 2005. "The Economics of Technology Sharing: Open Source and Beyond," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 99-120, Spring.
    5. Joachim Henkel & Eric von Hippel, 2005. "Welfare Implications of User Innovation," The Journal of Technology Transfer, Springer, vol. 30(2_2), pages 73-87, January.
    6. Joseph Zeira, 2011. "Innovations, patent races and endogenous growth," Journal of Economic Growth, Springer, vol. 16(2), pages 135-156, June.
    7. Nick Bostrom, 2017. "Strategic Implications of Openness in AI Development," Global Policy, London School of Economics and Political Science, vol. 8(2), pages 135-148, May.
    8. Grzegorz Konat, 2008. "Strategiczne rozwidlanie w tworzeniu Wolnego i Otwartego Oprogramowania," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 10, pages 23-43.
    9. Sebastian von Engelhardt, 2011. "What Economists Know about Open Source Software - Its Basic Principles and Research Results," Jena Economics Research Papers 2011-005, Friedrich-Schiller-University Jena.
    10. Paola Giuri & Gaia Rocchetti & Salvatore Torrisi, 2002. "Open Source Software: From Open Science to New Marketing Models," LEM Papers Series 2002/23, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    11. Auriol, Emmanuelle & Biancini, Sara, 2009. "Intellectual Property Rights Adoption in Developing Countries," TSE Working Papers 09-094, Toulouse School of Economics (TSE).

    More about this item

    Keywords

    Innovation; R&d; Growth; Open source; Philanthropy; Monopoly; Imperfect competition; Software industry;
    All these keywords.

    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • 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
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • 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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