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Economic Growth with Imperfect Protection of Intellectual Property Rights

Author

Listed:
  • Ryo Horii

    (Graduate School of Economics, Osaka University)

  • Tatsuro Iwaisako

    (Faculty of Economics, Ritsumeikan University)

Abstract

The growth effects of intellectual property right (IPR) protection are examined in a quality-ladder model of endogenous growth. Stronger IPR protection, which reduces the probability of imitation, raises the reward for innovation. However, stronger protection reduces the number of competitive sectors, in which it is easier to innovate than in monopolistic sectors, thus concentrating researchers into fewer competitive sectors. As R&D projects take time until they are completed, concentration of R&D activity in a field raises the possibility of duplication of innovation, thereby hindering growth. In several settings, we show that imperfect, rather than perfect, protection maximizes growth.

Suggested Citation

  • Ryo Horii & Tatsuro Iwaisako, 2005. "Economic Growth with Imperfect Protection of Intellectual Property Rights," Discussion Papers in Economics and Business 05-23, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:0523
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    intellectual property rights; endogenous growth; quality ladder; imitation; leapfrogging; duplication.;
    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
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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