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Economic Growth with Imperfect Protection of Intellectual Property Rights

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Author Info
Ryo Horii () (Graduate School of Economics, Osaka University)
Tatsuro Iwaisako () (Faculty of Economics, Ritsumeikan University)

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Abstract

This paper examines the growth effects of intellectual property right (IPR) protection in a quality-ladder model of endogenous growth. Stronger IPR protection, which reduces the imitation probability, increases the reward for innovation. However, stronger protection also gradually reduces the number of competitive sectors, in which innovation is easier than in monopolistic sectors. With free entry to R&D, the number of researchers in each remaining competitive sector increases, but the concentration of R&D activity raises the possibility of unnecessary duplication of innovation, thereby hindering growth. Consequently, imperfect rather than perfect protection maximizes growth. Welfare and scale effects are also examined.

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Publisher Info
Paper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 05-23-Rev..

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Length: 45 pages
Date of creation: Aug 2005
Date of revision: Apr 2006
Handle: RePEc:osk:wpaper:0523r

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Related research
Keywords: intellectual property rights; endogenous growth; quality ladder; imitation; leapfrogging; duplication.;

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Find related papers by JEL classification:
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
O34 - Economic Development, Technological Change, and Growth - - Technological Change - - - Intellectual Property Rights
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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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.)

  1. Lutz Arnold & Christian Bauer, 2009. "On the growth and welfare effects of monopolistic distortions," Journal of Economics, Springer, vol. 97(1), pages 19-40, May. [Downloadable!] (restricted)
  2. Zoltan J. Acs & Mark Sanders, 2008. "Intellectual Property Rights and the Knowledge Spillover Theory of Entrepreneurship," Working Papers 08-23, Utrecht School of Economics. [Downloadable!]
    Other versions:
  3. Chu, Angus C., 2009. "Macroeconomic Effects of Intellectual Property Rights: A Survey," MPRA Paper 17342, University Library of Munich, Germany. [Downloadable!]
  4. Tapio Palokangas, 2008. "Competition and product cycles with non-diversifiable risk," Journal of Economics, Springer, vol. 94(1), pages 1-30, 06. [Downloadable!] (restricted)
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