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This paper analyzes the effects of intellectual property rights in a quality-ladder model of endogenous growth in which incumbent firms preemptively innovate in order to keep their position of leadership. Unlike in models with leapfrogging, granting forward protection, and imposing a non-obviousness requirement reduces growth. In the main case where entrants and incumbents have free access to the same RD technology, infinite protection against imitation, granted independently of the size of the lead, maximizes growth. If entrants have to engage in costly catch up before they can undertake frontier RD, growth is maximal for a finite (expected) length of protection against imitation. AbstractThis article analyzes the effects of intellectual property rights in a qualityladder model of endogenous growth in which incumbent firms preemptively innovate in order to keep their position of leadership. Unlike in models with leapfrogging, granting forward protection, and imposing a non-obviousness requirement reduces growth. In the main case where entrants and incumbents have free access to the same R&D technology, infinite protection against imitation, granted independently of the size of the lead, maximizes growth. If entrants have to engage in costly catch up before they can undertake frontier R&D, growth is maximal for a finite (expected) length of protection against imitation. (JEL L40, O31, O34)

This paper analyzes the effects of intellectual property rights in a quality-ladder model of endogenous growth in which incumbent firms preemptively innovate in order to keep their position of leadership. Unlike in models with leapfrogging, granting forward protection, and imposing a non-obviousness requirement reduces growth. In the main case where entrants and incumbents have free access to the same RD technology, infinite protection against imitation, granted independently of the size of the lead, maximizes growth. If entrants have to engage in costly catch up before they can undertake frontier RD, growth is maximal for a finite (expected) length of protection against imitation. AbstractThis article analyzes the effects of intellectual property rights in a qualityladder model of endogenous growth in which incumbent firms preemptively innovate in order to keep their position of leadership. Unlike in models with leapfrogging, granting forward protection, and imposing a non-obviousness requirement reduces growth. In the main case where entrants and incumbents have free access to the same R&D technology, infinite protection against imitation, granted independently of the size of the lead, maximizes growth. If entrants have to engage in costly catch up before they can undertake frontier R&D, growth is maximal for a finite (expected) length of protection against imitation. (JEL L40, O31, O34)