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Patents, knowledge spillovers, and entrepreneurship

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Abstract

We develop an endogenous-growth model in which we distinguish between inventors and innovators. This distinction implies that stronger protection of intellectual property rights has an inverted U-shaped effect on economic growth. Intellectual property rights protection attributes part of the rents of commercial exploitation to the inventor that would otherwise accrue to the entrepreneur. Stronger patent protection will therefore increase the incentive to do research and development (R&D) and generate new knowledge. This new knowledge has a positive effect on entrepreneurship, innovation, and growth. However, after some point, further strengthening of patent protection will reduce the returns to entrepreneurship sufficiently to reduce the overall growth rate. Copyright The Author(s) 2012

Suggested Citation

  • Zoltan Acs & Mark Sanders, 2012. "Patents, knowledge spillovers, and entrepreneurship," Small Business Economics, Springer, vol. 39(4), pages 801-817, November.
    • Handle: RePEc:kap:sbusec:v:39:y:2012:i:4:p:801-817
    DOI: 10.1007/s11187-011-9322-y
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    More about this item

    Keywords

    Intellectual property rights; Knowledge spillovers; Endogenous growth; Entrepreneurship; R&D; Innovation; Invention processes; Inventions; M13; O31; O34; O41;
    All these keywords.

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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