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Status Preference And The Effects Of Patent Protection: Theory And Evidence

Author

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  • Pan, Shiyuan
  • Zhang, Mengbo
  • Zou, Heng-Fu

Abstract

We construct a growth model with status preference to explore the effects of patents on innovation and social welfare. We find a nonmonotonic effect of patent protection on innovation. Additionally, the growth-rate-maximizing degree of patent protection decreases when the strength of status preference is larger. The effect of patent protection on social welfare is ambiguous, depending on the strength of status preference. Moreover, wealth inequality widens as patent protection is reinforced. Finally, by using cross-section regression analysis, we document that a nonmonotonic relationship between patent protection and economic growth is statistically significant and that the growth-rate-maximizing degree of patent protection decreases with the strength of status preference.

Suggested Citation

  • Pan, Shiyuan & Zhang, Mengbo & Zou, Heng-Fu, 2018. "Status Preference And The Effects Of Patent Protection: Theory And Evidence," Macroeconomic Dynamics, Cambridge University Press, vol. 22(4), pages 837-863, June.
    • Handle: RePEc:cup:macdyn:v:22:y:2018:i:04:p:837-863_00
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    Cited by:

    1. Hu, Ruiyang & Yang, Yibai & Zheng, Zhijie, 2023. "Patent protection and income inequality in a model with two growth engines," Economic Modelling, Elsevier, vol. 123(C).
    2. Chu, Angus C. & Fan, Haichao & Wang, Xilin, 2020. "Status-seeking culture and development of capitalism," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 275-290.
    3. Qichun He & Yulei Luo & Jun Nie & Heng-fu Zou, 2023. "Money, Growth, and Welfare in a Schumpeterian Model with the Spirit of Capitalism," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 47, pages 346-372, January.
    4. Qichun He & Yulei Luo & Jun Nie & Heng-fu Zou, 2023. "Money, Growth, and Welfare in a Schumpeterian Model with the Spirit of Capitalism," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 47, pages 346-372, January.
    5. Wang, Gaowang & Zou, Heng-fu, 2025. "Romer Meets Weber-Schumpeter: The Spirit of Capitalism, Entrepreneurial Drive and Long-Run Growth," MPRA Paper 126518, University Library of Munich, Germany.
    6. 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.
    7. Hof, Franz X. & Prettner, Klaus, 2019. "The quest for status and R&D-based growth," Journal of Economic Behavior & Organization, Elsevier, vol. 162(C), pages 290-307.
    8. Hao Li & Gaowang Wang & Jun Yu, 2025. "Revisiting Optimal Capital Taxation with the Spirit of Capitalism," Annals of Economics and Finance, Society for AEF, vol. 26(2), pages 501-524, November.
    9. Annarita Baldanzi & Klaus Prettner & Paul Tscheuschner, 2019. "Longevity-induced vertical innovation and the tradeoff between life and growth," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(4), pages 1293-1313, October.
    10. Chu, Angus C. & Liao, Chih-Hsing, 2025. "Optimal patent policy and wealth inequality in a Schumpeterian economy," Journal of Macroeconomics, Elsevier, vol. 83(C).
    11. Noda, Hideo & Fang, Fengqi, 2025. "Pro-Patent Policy in the Knowledge-Based Economy," MPRA Paper 125646, University Library of Munich, Germany.
    12. Yoshihiro Hamaguchi, 2021. "Environmental policy and social status preference for education in an Uzawa–Lucas model," Bulletin of Economic Research, Wiley Blackwell, vol. 73(3), pages 456-468, July.
    13. Chu, Angus C. & Kou, Zonglai & Wang, Xilin, 2023. "Class struggle in a Schumpeterian economy," China Economic Review, Elsevier, vol. 82(C).

    More about this item

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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