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Technology Diffusion, Pareto Distribution, and Patent Policy

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  • Keiichi Kishi

    (Graduate School of Economics, Osaka University)

Abstract

We develop a Schumpeterian growth model based on technology diffu- sion. Each firm has a different productivity level. New entrants enter into the targeted industries by learning the existing technologies owned by the other firms. Some of the new entrants succeed to adopt the frontier tech- nology. The other new entrants may adopt the non-frontier technologies. We show that if it is extremely difficult to adopt the frontier technology, the technology diffusion generates the Pareto distributions of firm size, productivity, and innovation size. Further, we introduce the minimum innovation size required for a patent into the model. That is, the patent office grants the patents only for superior inventions. We show that an increase in minimum innovation size may reduce the average patentable innovation size because of an endogenous response of the distribution of innovation size. This implies that if the patent office requires the superior innovations for the patents, it may cause innovators to produce a larger amount of inferior patentable innovations.

Suggested Citation

  • Keiichi Kishi, 2016. "Technology Diffusion, Pareto Distribution, and Patent Policy," Discussion Papers in Economics and Business 16-31, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:1631
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    References listed on IDEAS

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    Cited by:

    1. Kishi, Keiichi & Okada, Keisuke, 2018. "Trade Liberalization, Technology Diffusion, and Productivity," MPRA Paper 88597, University Library of Munich, Germany.

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    More about this item

    Keywords

    Technology diffusion; Innovation; Pareto distribution;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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