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Effects of patent length on R&D: a quantitative DGE analysis

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  • Angus Chu

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Abstract

This paper develops an R&D-growth model and calibrates the model to aggregate data of the US economy to quantify a structural relation ship between patent length, R&D and consumption. Under parameter values that match the empirical flow-profit depreciation rate of patents and other key features of the US economy, extending the patent length beyond 20 years leads to a negligible increase in R&D despite equilibrium R&D underinvestment. In contrast, shortening the patent length leads to a significant reduction in R&D and consumption. Finally, this paper also analytically derives and quantifies a dynamic distortionary effect of patent length on capital investment.

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File URL: http://hdl.handle.net/10.1007/s00712-010-0110-y
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Bibliographic Info

Article provided by Springer in its journal Journal of Economics.

Volume (Year): 99 (2010)
Issue (Month): 2 (March)
Pages: 117-140

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Handle: RePEc:kap:jeczfn:v:99:y:2010:i:2:p:117-140

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Web page: http://www.springerlink.com/link.asp?id=108909

Related research

Keywords: Innovation-driven growth; Intellectual property rights; Patent length; R&D; O31; O34;

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References

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Citations

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Cited by:
  1. Shiyuan Pan & Heng-fu Zou & Tailong Li, 2010. "Patent Protection, Technological Change and Wage Inequality," CEMA Working Papers 437, China Economics and Management Academy, Central University of Finance and Economics.
  2. Chu, Angus C. & Leung, Charles Ka Yui & TANG, C. H. Edward, 2012. "Intellectual property rights, technical progress and the volatility of economic growth," MPRA Paper 38132, University Library of Munich, Germany.
  3. Angus C. Chu, 2009. "Macroeconomic Effects of Intellectual Property Rights: A Survey," IEAS Working Paper : academic research 09-A007, Institute of Economics, Academia Sinica, Taipei, Taiwan.
  4. Furukawa, Yuichi, 2010. "Intellectual property protection and innovation: an inverted-U relationship," Economics Letters, Elsevier, vol. 109(2), pages 99-101, November.

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