IDEAS home Printed from https://ideas.repec.org/p/zbw/ifwedp/20151.html
   My bibliography  Save this paper

Effects of intellectual property rights protection and integration on economic growth and welfare

Author

Listed:
  • Lai, Chung-hui
  • Wang, Vey

Abstract

The protection of intellectual property rights (IPR) and the distribution of rent are central issues in R&D-based growth models with the return to innovation serving as the engine of growth. In this paper the authors consider the strength of the intellectual property rights and franchise bargaining system to analyze how the rent/franchise fee and institutional quality affect the economic growth and social welfare. It is found that the intermediate good firm with full IPR protection charges a price equal to the marginal cost. In addition, if imitated technologies exhibit a labor spillover effect, decreasing the IPR protection will increase the rent/franchise fee. The authors also show that the growth-maximizing effects of IPR protection, the bargaining power of intermediate goods firms, and the imitation of technology are no longer equivalent to those effects on welfare-maximization since the welfare result depends on the relative degrees of the growth enhancing effect and crowding-out effect on production.

Suggested Citation

  • Lai, Chung-hui & Wang, Vey, 2015. "Effects of intellectual property rights protection and integration on economic growth and welfare," Economics Discussion Papers 2015-1, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwedp:20151
    as

    Download full text from publisher

    File URL: http://www.economics-ejournal.org/economics/discussionpapers/2015-1
    Download Restriction: no
    File URL: https://www.econstor.eu/bitstream/10419/106143/1/815347863.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Furukawa, Yuichi, 2007. "The protection of intellectual property rights and endogenous growth: Is stronger always better?," Journal of Economic Dynamics and Control, Elsevier, vol. 31(11), pages 3644-3670, November.
    2. Ryo Horii & Tatsuro Iwaisako, 2007. "Economic Growth with Imperfect Protection of Intellectual Property Rights," Journal of Economics, Springer, vol. 90(1), pages 45-85, January.
    3. Eicher, Theo & García-Peñalosa, Cecilia, 2008. "Endogenous strength of intellectual property rights: Implications for economic development and growth," European Economic Review, Elsevier, vol. 52(2), pages 237-258, February.
    4. Guifang Yang & Keith Maskus, 2001. "Intellectual property rights and licensing: An econometric investigation," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 137(1), pages 58-79, March.
    5. Benassy, Jean-Pascal, 1998. "Is there always too little research in endogenous growth with expanding product variety?," European Economic Review, Elsevier, vol. 42(1), pages 61-69, January.
    6. Etienne Pfister & Bruno Deffains & Myriam Doriat-Duban & Stéphane Saussier, 2006. "Institutions and contracts: Franchising," European Journal of Law and Economics, Springer, vol. 21(1), pages 53-78, January.
    7. Kwan, Yum K. & Lai, Edwin L. -C., 2003. "Intellectual property rights protection and endogenous economic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 27(5), pages 853-873, March.
    8. Theo Eicher & Cecilia García-Peñalosa, 2008. "Endogenous Strength of Intellectual Property Rights," Working Papers UWEC-2007-14-P, University of Washington, Department of Economics.
    9. Michael Ferrantino, 1993. "The effect of intellectual property rights on international trade and investment," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 129(2), pages 300-331, June.
    10. Futagami, Koichi & Iwaisako, Tatsuro, 2007. "Dynamic analysis of patent policy in an endogenous growth model," Journal of Economic Theory, Elsevier, vol. 132(1), pages 306-334, January.
    11. Vey Wang & Chung-Hui Lai & Lung-Sheng Lee & Shih-Wen Hu, 2010. "Franchise fee, contract bargaining, and economic growth," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 19(6), pages 539-552.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chung-Hui Lai, 2015. "Effects of Intellectual Property Rights Protection and Integration on Economic Growth and Welfare," Journal of Economics and Management, College of Business, Feng Chia University, Taiwan, vol. 11(2), pages 143-162, July.
    2. Keiichi Kishi, 2014. "A patentability requirement and industries targeted by R&D," Discussion Papers in Economics and Business 14-27, Osaka University, Graduate School of Economics.
    3. Andreas Irmen & Johanna Kuehnel, 2011. "Property rights, optimal public enforcement, and growth," DEM Discussion Paper Series 11-18, Department of Economics at the University of Luxembourg.
    4. Chu, Angus C. & Cozzi, Guido & Galli, Silvia, 2012. "Does intellectual monopoly stimulate or stifle innovation?," European Economic Review, Elsevier, vol. 56(4), pages 727-746.
    5. Iwaisako, Tatsuro & Tanaka, Hitoshi & Futagami, Koichi, 2011. "A welfare analysis of global patent protection in a model with endogenous innovation and foreign direct investment," European Economic Review, Elsevier, vol. 55(8), pages 1137-1151.
    6. Chu, Angus C. & Cozzi, Guido & Galli, Silvia, 2012. "Does intellectual monopoly stimulate or stifle innovation?," European Economic Review, Elsevier, vol. 56(4), pages 727-746.
    7. Azevedo, Mónica L. & Afonso, Óscar & Silva, Sandra T., 2014. "Endogenous growth and intellectual property rights: A north–south modeling proposal," Economic Modelling, Elsevier, vol. 38(C), pages 112-120.
    8. Schäfer, Andreas & Schneider, Maik T., 2015. "Endogenous Enforcement Of Intellectual Property, North–South Trade, And Growth," Macroeconomic Dynamics, Cambridge University Press, vol. 19(5), pages 1074-1115, July.
    9. Gangopadhyay, Kausik & Mondal, Debasis, 2012. "Does stronger protection of intellectual property stimulate innovation?," Economics Letters, Elsevier, vol. 116(1), pages 80-82.
    10. Cysne, Rubens P. & Turchick, David, 2012. "Intellectual property rights protection and endogenous economic growth revisited," Journal of Economic Dynamics and Control, Elsevier, vol. 36(6), pages 851-861.
    11. Chu, Angus C. & Furukawa, Yuichi, 2011. "On the optimal mix of patent instruments," Journal of Economic Dynamics and Control, Elsevier, vol. 35(11), pages 1964-1975.
    12. Chu, Angus C. & Leung, Charles K.Y. & Tang, Edward, 2012. "Intellectual property rights, technical progress and the volatility of economic growth," Journal of Macroeconomics, Elsevier, vol. 34(3), pages 749-756.
    13. Angus C. Chu, 2022. "Patent policy and economic growth: A survey," Manchester School, University of Manchester, vol. 90(2), pages 237-254, March.
    14. Iwaisako, Tatsuro, 2020. "Welfare Effects Of Patent Protection In A Semi-Endogenous Growth Model," Macroeconomic Dynamics, Cambridge University Press, vol. 24(3), pages 708-728, April.
    15. Chu, Angus C. & Cozzi, Guido & Galli, Silvia, 2014. "Stage-dependent intellectual property rights," Journal of Development Economics, Elsevier, vol. 106(C), pages 239-249.
    16. Angus C. Chu, 2024. "Macroeconomic effects of intellectual property rights: an updated survey," Chapters, in: Walter G. Park (ed.), Handbook of Innovation and Intellectual Property Rights, chapter 2, pages 13-26, Edward Elgar Publishing.
    17. Furukawa, Yuichi, 2010. "Intellectual property protection and innovation: an inverted-U relationship," Economics Letters, Elsevier, vol. 109(2), pages 99-101, November.
    18. 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.
    19. Iwaisako, Tatsuro, 2013. "Welfare effects of patent protection and productive public services: Why do developing countries prefer weaker patent protection?," Economics Letters, Elsevier, vol. 118(3), pages 478-481.
    20. Angus C. Chu & Yuichi Furukawa, 2013. "Patentability and Knowledge Spillovers of Basic R&D," Southern Economic Journal, John Wiley & Sons, vol. 79(4), pages 928-945, April.

    More about this item

    Keywords

    IPR; R&D; bargaining; endogenous growth; social welfare;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:ifwedp:20151. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/iwkiede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.