IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-11-00653.html
   My bibliography  Save this article

Knowledge diffusion vs. technological progress: the optimal strength of IPRs protection

Author

Listed:
  • Shuai Niu

    () (School of Economics, Australian School of Business, The University of New South Wales)

Abstract

By adjusting the strength of IPRs protection, the government can change the extent of knowledge spillovers in R&D. A large spillover rate helps to improve the productivity of the less efficient firms and save on the overall production costs. But, at the same time, it reduces the innovator's incentives to conduct R&D and results in a lower equilibrium innovation level. So, there is an inherent tension between knowledge diffusion and technological progress. In this paper, we formalized this relationship in a two stage asymmetric duopoly model and discussed the optimal IPRs protection policy. The main conclusion is that, to maximize social welfare the strength of IPRs protection should rise as the increase of the innovating firm's R&D efficiency.

Suggested Citation

  • Shuai Niu, 2011. "Knowledge diffusion vs. technological progress: the optimal strength of IPRs protection," Economics Bulletin, AccessEcon, vol. 31(4), pages 2839-2846.
  • Handle: RePEc:ebl:ecbull:eb-11-00653
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I4-P255.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Leahy, Dermot & Neary, J Peter, 1997. "Public Policy towards R&D in Oligopolistic Industries," American Economic Review, American Economic Association, vol. 87(4), pages 642-662, September.
    2. Darmot Leahy & J. Peter Neary, 1997. "Veřejná politiky v oblasti výzkumu a vývoje v oligopolním průmyslu
      [Public Policy Towards R & D in Oligopolistic Industry]
      ," Politická ekonomie, University of Economics, Prague, vol. 1997(5), pages 683-698.
    3. James A. Brander & Barbara J. Spencer, 1983. "Strategic Commitment with R&D: The Symmetric Case," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 225-235, Spring.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    spillovers; knowledge diffusion; technological progress; IPRs;

    JEL classification:

    • L0 - Industrial Organization - - General
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-11-00653. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John P. Conley). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.