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Growth Effects Of Nonproprietary Innovation

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  • Gilles Saint-Paul

    (IDEI, GREMAQ, LEERNA, Université des Sciences Sociales de Toulouse, CEPR, IZA, and CESIfo,)

Abstract

We study an endogenous growth model where a profit-motivated R and D sector coexists with the introduction of free blueprints invented by philanthropists. These goods are priced at marginal cost, contrary to proprietary ones which are produced by a monopoly owned by the inventor. We show that philanthropy does not necessarily increase long-run growth and that it may even reduce welfare. The reason is that it crowds out proprietary innovation which on net may reduce total innovation in the long run. These effects would be reinforced if philanthropical innovation diverted people from other productive activities, if free goods were less taylored to customers than proprietary ones, and if philanthropical inventors sometimes came out with another version of an existing proprietary good. Dynamics can also be characterized and it is shown that the impact effect of free inventions on growth is positive. (JEL: L12, L13, L16, L86, O31, O32, O34) Copyright (c) 2003 The European Economic Association.

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Bibliographic Info

Article provided by MIT Press in its journal Journal of the European Economic Association.

Volume (Year): 1 (2003)
Issue (Month): 2-3 (04/05)
Pages: 429-439

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Handle: RePEc:tpr:jeurec:v:1:y:2003:i:2-3:p:429-439

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Cited by:
  1. Andreas Freytag & Sebastian von Engelhardt, 2010. "Institutions, Culture, and Open Source," Jena Economic Research Papers 2010-010, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  2. Alireza Naghavi & Chiara Strozzi, 2011. "Intellectual Property Rights, Migration, and Diaspora," Center for Economic Research (RECent) 068, University of Modena and Reggio E., Dept. of Economics.
  3. Josh Lerner & Jean Tirole, 2005. "The Economics of Technology Sharing: Open Source and Beyond," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 99-120, Spring.
  4. Henkel, Joachim & von Hippel, Eric, 2003. "Welfare Implications of User Innovation," CEPR Discussion Papers 4063, C.E.P.R. Discussion Papers.
  5. Joseph Zeira, 2011. "Innovations, patent races and endogenous growth," Journal of Economic Growth, Springer, vol. 16(2), pages 135-156, June.
  6. Paola Giuri & Gaia Rocchetti & Salvatore Torrisi, 2002. "Open Source Software: From Open Science to New Marketing Models," LEM Papers Series 2002/23, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

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