Innovations, Patent Races and Endogenous Growth

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Innovations, Patent Races and Endogenous Growth

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Zeira, Joseph

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Joseph Zeira

Abstract

This Paper presents a model of innovations and economic growth, in which patent rates emerge endogenously, as a result of two assumptions: first, R&D is innovation-specific, second, marginal cost of innovation is increasing. The Paper then examines the effects of patent races on growth, welfare, and the market structure of R&D, and derives three main results. The first is that patent races reduce significantly the effect of scale on growth. The second result is that R&D is Pareto-inefficient, as too many researchers look for the easy innovations, while too few search for the difficult ones. The third result is that risk aversion leads to concentration of R&D in few firms, to reduce risk of patent race. Interestingly this does not contribute to growth but rather to more duplication.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3974.

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Date of creation: Jul 2003
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Handle: RePEc:cpr:ceprdp:3974

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Paper
- Zeira, Joseph, 2002. "Innovations, Patent Races, and Endogenous Growth," Working Paper Series rwp02-047, Harvard University, John F. Kennedy School of Government. [Downloadable!]

Find related papers by JEL classification:
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

This paper has been announced in the following NEP Reports:

NEP-DEV-2003-10-05 (Development)
NEP-INO-2003-10-05 (Innovation)

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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Other versions:
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Other versions:
- Charles I. Jones & John C. Williams, . "Measuring the Social Return to R&D," Working Papers 97002, Stanford University, Department of Economics. [Downloadable!]
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Cecilia García-Peñalosa & Jean-François Wen, 2008. "Redistribution and entrepreneurship with Schumpeterian growth," Journal of Economic Growth, Springer, vol. 13(1), pages 57-80, March. [Downloadable!] (restricted)
Carillo, Maria Rosaria & Papagni, Erasmo & Capitanio, Fabian, 2007. "Effects of social interactions on scientists' productivity," MPRA Paper 7880, University Library of Munich, Germany. [Downloadable!]
Other versions:
- Maria Rosaria Carillo & Erasmo Papagni & Fabian Capitanio, 2006. "Effects of social interactions on Scientists’ productivity," Discussion Papers 19_2006, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy. [Downloadable!]
- Maria Rosaria Carillo & Erasmo Papagni & Fabian Capitanio, 2008. "Effects of social interactions on scientists' productivity," International Journal of Manpower, Emerald Group Publishing, vol. 29(3), pages 263-279, July. [Downloadable!] (restricted)
Federico Etro, 2004. "Innovation by leaders," Economic Journal, Royal Economic Society, vol. 114(495), pages 281-303, 04. [Downloadable!] (restricted)
Maria Rosaria Carillo & Erasmo Papagni, 2004. "Academic Research, Social Interactions And Economic Growth," Working Papers 10_2004, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy. [Downloadable!]
Other versions:
- Maria Rosaria Carillo & Erasmo Papagni, 2006. "Academic Research, Social Interactions and Economic Growth," Discussion Papers 9_2006, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy. [Downloadable!]
Färnstrand Damsgaard, Erika, 2009. "Patent Scope and Technology Choice," Working Paper Series 792, Research Institute of Industrial Economics. [Downloadable!]
Federico Etro, 2006. "Market Leaders and Industrial Policy," Working Papers 103, University of Milano-Bicocca, Department of Economics, revised Nov 2006. [Downloadable!]

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