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Competition, patent protection, and innovation with heterogeneous firms in an endogenous market structure

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  • Keishun Suzuki

Abstract

This paper revisits the relationship between competition and innovation by incorporating the heterogeneity of R&D efficiency across firms and an endogenous market structure in a dynamic general equilibrium model. Using an analytically tractable model, we show that competition and innovation can have either an inverted‐U or a negative relationship, as reported by several empirical studies. Furthermore, we show that the effect of strengthening patent protection on innovation depends on the competition level. In particular, we find a complementary relationship between competition policy and the strengthening of patent protection.

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  • Keishun Suzuki, 2020. "Competition, patent protection, and innovation with heterogeneous firms in an endogenous market structure," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(3), pages 729-750, June.
    • Handle: RePEc:bla:jpbect:v:22:y:2020:i:3:p:729-750
    DOI: 10.1111/jpet.12415
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    References listed on IDEAS

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    1. Yan Han & Cheng Pan & Fengjun Jin, 2023. "Does the Improvement of the Business Environment Improve the Innovation Efficiency of Enterprises? Evidence from the Listed Companies in China," Sustainability, MDPI, vol. 15(14), pages 1-25, July.

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