Effects of patents on the transition from stagnation to growth

Abstract

This study provides a growth-theoretic analysis of the effects of intellectual property rights on the takeoff of an economy from an era of stagnation to a state of sustained economic growth. We incorporate patent protection into a Schumpeterian growth model in which takeoff occurs when the population size crosses an endogenous threshold. We find that strengthening patent protection has contrasting effects on economic growth at different stages of development. Specifically, it leads to an earlier takeoff but also reduces economic growth in the long run. Keywords Intellectual property rights • Endogenous takeoff • Innovation • Economic growth JEL Classification O31 • O34 "England [...] by 1700 [...] had developed an efficient set of property rights embedded in the common law [and...] begun to protect private property in knowledge with its patent law. The stage was now set for the industrial revolution." North and Thomas (1973, p. 156

Corporate governance and industrialization

“…Models of this class have symmetric equilibria in which …rms charge the same price, P = 1= , and have the same quality level at all times. 9 Also, as they receive N P X = Y from the …nal producer, we have X = 2 Y =N . Writing the production function (1) under symmetry and using this result to eliminate X, we obtain…”

“…Income Ratio Predicted by the Model, East Asian Countries The prediction refers to the estimates in table7. See note table(9) for further explanations.…”

EFFECTS OF R&D SUBSIDIES IN A HYBRID MODEL OF ENDOGENOUS GROWTH AND SEMI-ENDOGENOUS GROWTH

“…which implies that the asset-output ratio A t =Y t is constant. Substituting (A9), (2), (3) and (5) into…”

“…In this literature, seminal studies include Galor and Weil (2000) and Galor and Moav (2002), who develop uni…ed growth theory. 5 Uni…ed growth theory shows that the quality-quantity tradeo¤ in childrearing and human capital accumulation allow an economy to escape from the Malthusian trap and experience economic takeo¤. 6 While human capital is certainly a crucial engine of economic growth, innovation is another important engine of growth.…”

“…SeeLaincz and Peretto (2006) andHa and Howitt (2007) for empirical evidence that supports the second-generation Schumpeterian model 4. See also Cozzi (2017a,b) who develops a general innovation speci…cation that may yield semi-endogenous growth or fully endogenous growth in the long run 5. See alsoJones (2001) andHansen and Prescott (2002) for other early studies on endogenous takeo¤ 6.…”