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Quantifying the Effects of Patent Protection on Innovation, Imitation, Growth, and Aggregate Productivity

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  • Bento Pedro

    (Department of Economics, Texas A&M University, 254 Liberal Arts Social Sciences Building, 4228 TAMU, College Station, TX, 77843, USA)

Abstract

I develop a general equilibrium model in which patent protection can increase or decrease the costs of sequential innovation, original innovation, and imitation. Depending on these relative effects, protection can in theory increase or decrease markups, imitation, innovation, growth, and aggregate productivity. I discipline the model using data from several different sources, and find that weakening protection in the U.S. would lead to no change in markups and imitation, no change in long-run growth, a significant increase in the number of firms, and an increase in aggregate productivity of 11%.

Suggested Citation

  • Bento Pedro, 2021. "Quantifying the Effects of Patent Protection on Innovation, Imitation, Growth, and Aggregate Productivity," The B.E. Journal of Macroeconomics, De Gruyter, vol. 21(1), pages 1-35, January.
    • Handle: RePEc:bpj:bejmac:v:21:y:2021:i:1:p:1-35:n:10
    DOI: 10.1515/bejm-2019-0120
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    1. Furukawa, Yuichi & Lai, Tat-kei & Sato, Kenji, 2019. "Love of Novelty: A Source of Innovation-Based Growth... or Underdevelopment Traps?," MPRA Paper 92915, University Library of Munich, Germany.

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    More about this item

    Keywords

    patent protection; firm size; productivity; innovation; imitation; competition;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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