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Endogenous Recombinant Growth And Intellectual Property Rights

Author

Listed:
  • Marchese, Carla
  • Marsiglio, Simone
  • Privileggi, Fabio
  • Ramello, Giovanni B.

Abstract

We show that, even in a framework in which monopolistic exploitation of patents does not occur, patents still give rise to serious drawbacks. We rely on a recombinant growth framework that provides a stylized but clear description of the formation of knowledge externalities. In our setting a benevolent government buys immediately new patents in a competitive market and releases their contents for free. We show that inefficiencies nevertheless arise and welfare can be improved by correcting the market price through a tax–subsidy scheme. We characterize the (asymptotic) steady-state equilibrium, and some properties of the transitional path. We show that if certain conditions are met, then the economy will converge to its (asymptotic) balanced growth path, and along such a pathgrowth will be independent of the policy parameter; conversely, transition dynamics are affected by the choice of the policy parameter. We then quantitatively analyze the effect of different policy interventions on welfare, and show that stricter tax (weaker appropriability) regimes lead to higher social welfare.

Suggested Citation

  • Marchese, Carla & Marsiglio, Simone & Privileggi, Fabio & Ramello, Giovanni B., 2019. "Endogenous Recombinant Growth And Intellectual Property Rights," Macroeconomic Dynamics, Cambridge University Press, vol. 23(5), pages 2035-2067, July.
    • Handle: RePEc:cup:macdyn:v:23:y:2019:i:05:p:2035-2067_00
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    Cited by:

    1. Nicolo Barbieri & Alberto Marzucchi & Ugo Rizzo, 2021. "Green technologies, complementarities, and policy," SPRU Working Paper Series 2021-08, SPRU - Science Policy Research Unit, University of Sussex Business School.
    2. Liu, Xielin & Ji, Xiaohui & Ge, Shuang, 2024. "Does the complexity and embeddedness of knowledge recombination contribute to economic development? —— Observations from prefecture cities in China," Research Policy, Elsevier, vol. 53(2).
    3. Barbieri, Nicolò & Marzucchi, Alberto & Rizzo, Ugo, 2023. "Green technologies, interdependencies, and policy," Journal of Environmental Economics and Management, Elsevier, vol. 118(C).
    4. Yin, Hua & Yin, Xieyu & Wen, Fenghua, 2025. "Artificial intelligence and climate risk: A double machine learning approach," International Review of Financial Analysis, Elsevier, vol. 103(C).
    5. Brett M. Frischmann & Alain Marciano & Giovanni Battista Ramello, 2019. "Retrospectives: Tragedy of the Commons after 50 Years," Journal of Economic Perspectives, American Economic Association, vol. 33(4), pages 211-228, Fall.

    More about this item

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • 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
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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