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Patent policy, invention and innovation in the theory of Schumpeterian growth

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  • Klein, Michael

Abstract

I develop an endogenous growth model that separates firm decisions to invent, patent, and commercialize new innovations. I use the model to examine how multiple dimensions of patent policy impact economic growth by shaping these relative incentives. I pay particular attention to the role of patenting requirements that dictate how far along the development process an inventor must progress to obtain a patent. The model formalizes how strengthening such requirements generates competing effects on economic growth; stronger requirements reduce ex ante research incentives by increasing the expected cost of patenting, but increase ex post incentives to fully develop patented inventions into commercial innovations by decreasing the additional cost associated with commercialization. Overall, my analysis supports the use of patenting requirements as an effective policy tool to improve economic outcomes by shifting incentives away from invention in the pursuit of patents and towards the development of commercial innovations.

Suggested Citation

  • Klein, Michael, 2024. "Patent policy, invention and innovation in the theory of Schumpeterian growth," MPRA Paper 122283, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:122283
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    References listed on IDEAS

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    More about this item

    Keywords

    Patent policy; Patenting requirements; Invention; Innovation; Economic growth;
    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
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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