Dynamic analysis of patent policy in an endogenous growth model

Futagami, Koichi; Iwaisako, Tatsuro

doi:10.1016/j.jet.2005.07.009

Cited by 92 publications

(74 citation statements)

References 21 publications

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“…Also, the calibration exercise takes into consideration Comin's (2004) critique that long-run TFP growth may not be solely driven by R&D. Furthermore, the current paper complements the qualitative partialequilibrium studies on leading breadth from the patent-design literature, 2 such as Green and Scotchmer Futagami and Iwaisako (2007). These studies are also qualitatively oriented and do not feature capital so that the dynamic distortionary effect of patent policy is absent.…”

Section: Literature Reviewmentioning

confidence: 89%

“…The average annual TFP growth rate TFP g is 1.33%, 9 and the average labor-force growth rate n is 1.94%. 10 The annual depreciation rate δ on physical capital and the household's discount rate ρ are set to conventional values of 8% and 4% respectively. For the markup µ , Laitner and Stolyarov (2004) estimate that the markup is about 1.1 (i.e.…”

Section: Backloading Discount Factormentioning

confidence: 99%

“…9 Multifactor productivity for the private non-farm business sector is obtained from the Bureau of Labor Statistics. 10 The data on the annual average size of the labor force is obtained from the Bureau of Labor Statistics. 11 A higher markup would imply a more severe effect of blocking patents.…”

Section: Backloading Discount Factormentioning

confidence: 99%

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Effects of blocking patents on R&D: a quantitative DGE analysis

Chu

2009

J Econ Growth

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What are the effects of blocking patents on R&D and consumption? This paper develops a quality-ladder growth model with overlapping intellectual property rights and capital accumulation to quantitatively evaluate the effects of blocking patents. The analysis focuses on two policy variables (a) patent breadth that determines the amount of profits created by an invention, and (b) the profit-sharing rule that determines the distribution of profits between current and former inventors along the quality ladder. The model is calibrated to aggregate data of the US economy. Under parameter values that match key features of the US economy and show equilibrium R&D underinvestment, I find that reducing the extent of blocking patents by changing the profit-sharing rule would lead to a significant increase in R&D, consumption and welfare. Also, the paper derives and quantifies a dynamic distortionary effect of patent policy on capital accumulation.

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Section: Literature Reviewmentioning

confidence: 89%

Section: Backloading Discount Factormentioning

confidence: 99%

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Effects of blocking patents on R&D: a quantitative DGE analysis

Chu

2009

J Econ Growth

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“…An early study by Nordhaus (1969) …nds that the optimal patent length should balance the static distortionary e¤ect of markup pricing and the dynamic gain from enhanced innovation. In a dynamic general-equilibrium model, Judd (1985) …nds that the optimal patent length is in…nite while Iwaisako and Futagami (2003) and Futagami and Iwaisako (2007) …nd that the optimal patent length can be …nite in a version of the Romer model. Kwan and Lai (2003) show that extending the e¤ective lifetime of patent would lead to a substantial increase in R&D and welfare whereas Li (2001) and O'Donoghue and Zweimuller (2004) consider the e¤ects of patent breadth on R&D and economic growth.…”

Section: Introductionmentioning

confidence: 99%

Stage-dependent intellectual property rights

Chu

Cozzi

Galli

2014

Journal of Development Economics

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Inspired by the Chinese experience, we develop a Schumpeterian growth model of distance to frontier in which economic growth in the developing country is driven by domestic innovation as well as imitation and transfer of foreign technologies through foreign direct investment. We show that optimal intellectual property rights (IPR) protection is stage-dependent. At an early stage of development, the country implements weak IPR protection to facilitate imitation. At a later stage of development, the country implements strong IPR protection to encourage domestic innovation. Therefore, the growth-maximizing and welfare-maximizing levels of patent strength increase as the country evolves towards the world technology frontier, and this dynamic pattern is consistent with the actual evolution of patent strength in China. We are very grateful to the anonymous Referees and Patrick Francois (the Editor) for their insightful comments that have improved the manuscript signi…cantly. We also would like to thank Elias Dinopoulos, Rachel Gri¢ th, Oleksandr Talavera, Fabrizio Zilibotti, and seminar participants at

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“…Judd (1985), Futagami and Iwaisako (2007), Chu (2009) andJerbashian (2016), among others, analyze the welfare effects of intellectual property regulations. In turn, Forni, Gerali, and Pisani (2010), Eggertsson, Ferrero, and Raffo (2014) and Papageorgiou and Vourvachaki (2015) offer a detailed account of welfare implications of product market regulations in large, comprehensive frameworks.…”

Section: Introductionmentioning

confidence: 99%

Intellectual Property and Product Market Competition Regulations in a Model with Two R&D Performing Sectors

Jerbashian

2017

SSRN Journal

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I analyze the impact of intellectual property and product market competition regulations on innovation and long-run growth in an endogenous growth model with two R&D performing sectors. I show that strengthening intellectual property rights and competition in a sector increases its R&D investments. However, these policies adversely affect R&D investments of the other sector. The overall impact of such policies on economic growth is ambiguous because of this. I perform a numerical exercise in an attempt of resolving the ambiguity. This exercise suggests that strengthening intellectual property rights can increase economic growth, but higher competition has a very limited effect on growth.JEL Codes: O31, O34, L16,L50, O41.

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Dynamic analysis of patent policy in an endogenous growth model

Cited by 92 publications

References 21 publications

Effects of blocking patents on R&D: a quantitative DGE analysis

Effects of blocking patents on R&D: a quantitative DGE analysis

Stage-dependent intellectual property rights

Intellectual Property and Product Market Competition Regulations in a Model with Two R&D Performing Sectors

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