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Patents' novelty requirement and endogenous growth

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  • Gilles Koléda

Abstract

In this paper, I develop and endogenous quality ladders growth model, in which the patent Office imposes a novelty requirement for innovations. The size of innovations realized by firms are heterogeneous and drawn from a probability distribution. They determine the price setting behaviour of firms: limit pricing strategy if innovation is non-drastic, or monopoly pricing without constraint if it is a drastic one. Both monopoly configurations are possible for a sector, depending on the size of the innovation in vigour. The aggregation of all the industries in the economy enables to exhibit the proportion of sectors in each case and the strength of competitive pressure in the economy. The patent?s novelty requirement has an effect both on the average height of innovations and the economy?s market structure of the economy. Patent height stands to be an instrument for regulating innovation and growth. We explore its effects on welfare and ressources allocation to research activity and discuss its implications for competition and market structure.

Suggested Citation

  • Gilles Koléda, 2004. "Patents' novelty requirement and endogenous growth," Revue d'économie politique, Dalloz, vol. 114(2), pages 201-221.
    • Handle: RePEc:cai:repdal:redp_142_0201
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    References listed on IDEAS

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    1. Philippe Aghion & Christopher Harris & Peter Howitt & John Vickers, 2001. "Competition, Imitation and Growth with Step-by-Step Innovation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(3), pages 467-492.
    2. Philippe Michel & Jules Nyssen, 1998. "On Knowledge Diffusion, Patents Lifetime and Innovation Based Endogenous Growth," Annals of Economics and Statistics, GENES, issue 49-50, pages 77-103.
    3. repec:adr:anecst:y:1998:i:49-50:p:03 is not listed on IDEAS
    4. Aghion, Philippe & Harris, Christopher & Vickers, John, 1997. "Competition and growth with step-by-step innovation: An example," European Economic Review, Elsevier, vol. 41(3-5), pages 771-782, April.
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    Cited by:

    1. Akimoto, Kiyoka & Morimoto, Takaaki, 2020. "Examination and Approval of New Patents in an Endogenous Growth Model," Economic Modelling, Elsevier, vol. 91(C), pages 100-109.
    2. Gilles Koléda, 2005. "Northern and Southern Patent Novelty Requirements Harmonization, Growth and Trade," DEGIT Conference Papers c010_025, DEGIT, Dynamics, Economic Growth, and International Trade.
    3. Jacobo Campo Robledo, 2012. "Impacto de las Patentes sobre el crecimiento económico: Un modelo panel cointegrado," Estudios Económicos SIC 10091, Superintendencia de Industria y Comercio.
    4. Chu, Angus C. & Cozzi, Guido & Galli, Silvia, 2012. "Does intellectual monopoly stimulate or stifle innovation?," European Economic Review, Elsevier, vol. 56(4), pages 727-746.
    5. Chu, Angus C., 2009. "Macroeconomic Effects of Intellectual Property Rights: A Survey," MPRA Paper 17342, University Library of Munich, Germany.
    6. Kiyoka Akimoto & Takaaki Morimoto, 2017. "Examination and Approval of New Products in an Endogenous Growth Model," Discussion Papers in Economics and Business 17-33, Osaka University, Graduate School of Economics.
    7. Hu, Mei-Ying & Lu, You-Xun & Lai, Ching-chong, 2023. "Patent term extensions and commercialization lags in the pharmaceutical industry: A growth-theoretic analysis," Journal of Macroeconomics, Elsevier, vol. 76(C).
    8. Jacobo Campo Robledo & Juan Pablo Herrera Saavedra, 2016. "Patentes y crecimiento económico: ¿innovación de residentes o no residentes?," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, vol. 76, February.
    9. Reinan Ribeiro & David Turchick, 2014. "Optimal patent breadth in a horizontal innovation growth model," Working Papers, Department of Economics 2014_15, University of São Paulo (FEA-USP).
    10. Jacobo Campo Robledo, 2012. "Impacto de las patentes sobre el crecimiento económico: un modelo panel cointegrado 1990-2010," Revista Equidad y Desarrollo, Universidad de la Salle, October.
    11. Cysne, Rubens P. & Turchick, David, 2012. "Intellectual property rights protection and endogenous economic growth revisited," Journal of Economic Dynamics and Control, Elsevier, vol. 36(6), pages 851-861.

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