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Growth and Welfare Effects of Patentability and Knowledge Spillovers of Basic R&D

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  • Chu, Angus C.
  • Furukawa, Yuichi

Abstract

This study develops an R&D-based growth model with basic and applied research to analyze the growth and welfare effects of two patent instruments (a) the patentability of basic R&D and (b) the division of profi�t between basic and applied researchers. We �find that for the purpose of stimulating basic R&D and economic growth simultaneously, increasing the share of profi�t assigned to basic researchers is more effective than raising the patentability of basic R&D, which has either a negative effect or an inverted-U effect on technological progress. Nonetheless, a benevolent patent authority requires both patent instruments to achieve the socially optimal allocation in the decentralized economy.

Suggested Citation

  • Chu, Angus C. & Furukawa, Yuichi, 2011. "Growth and Welfare Effects of Patentability and Knowledge Spillovers of Basic R&D," MPRA Paper 27813, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:27813
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    References listed on IDEAS

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    Cited by:

    1. Yang, Xuebing, 2013. "Horizontal inventive step and international protection of intellectual property," International Review of Economics & Finance, Elsevier, vol. 25(C), pages 338-355.

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    More about this item

    Keywords

    economic growth; innovation; intellectual property rights;
    All these keywords.

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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