Effects of Patent Length on R&D: A Quantitative DGE Analysis
AbstractThis paper develops an R&D-growth model and calibrates the model to aggregate data of the US economy to quantify a structural relationship between patent length, R&D and consumption. Under parameter values that match the empirical flow-profit depreciation rate of patents and other key features of the US economy, extending the patent length beyond 20 years leads to a negligible increase in R&D despite equilibrium R&D underinvestment. In contrast, shortening the patent length leads to a significant reduction in R&D and consumption. Finally, this paper also analytically derives and quantifies a dynamic distortionary effect of patent length on capital investment.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 16918.
Date of creation: Aug 2009
Date of revision:
innovation-driven growth; intellectual property rights; patent length; R&D;
Other versions of this item:
- Angus Chu, 2010. "Effects of patent length on R&D: a quantitative DGE analysis," Journal of Economics, Springer, vol. 99(2), pages 117-140, March.
- Angus C. Chu, 2009. "Effects of Patent Length on R&D: A Quantitative DGE Analysis," IEAS Working Paper : academic research 09-A001, Institute of Economics, Academia Sinica, Taipei, Taiwan, revised Dec 2009.
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-08-30 (All new papers)
- NEP-DGE-2009-08-30 (Dynamic General Equilibrium)
- NEP-INO-2009-08-30 (Innovation)
- NEP-IPR-2009-08-30 (Intellectual Property Rights)
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