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To B or Not To B: A Welfare Analysis of Breaking Up Monopolies in an Endogenous Growth Model

Author

Listed:
  • Danyang Xie

Abstract

This paper studies the welfare consequences of a government regulation that forces a patented equipment to be supplied by a number of independent producers. On the one hand, such a regulation hurts the value of a patent and therefore reduces activities in the R&D sector. On the other hand, the enhanced competition for the equipment improves efficiency in the manufacturing sector. Should monopolies protected by intellectual property rights be broken up? The answer is "no" in a Romer-type growth model, but there is sufficient reason to believe that the answer could be "yes" in a model advocated by Jones (1995).

Suggested Citation

  • Danyang Xie, 2002. "To B or Not To B: A Welfare Analysis of Breaking Up Monopolies in an Endogenous Growth Model," GE, Growth, Math methods 0207002, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpge:0207002
    Note: Type of Document - Acrobat PDF; prepared on PC; to print on HP; pages: 17; figures: none
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    More about this item

    Keywords

    R&D; Endogenous Growth; Competition Policy;
    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
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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