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Intellectual property rights in a quality-ladder model with persistent leadership

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  • Kiedaisch, Christian

Abstract

This paper analyzes the effects of intellectual property rights in a quality-ladder model of endogenous growth in which incumbent firms preemptively innovate in order to keep their position of leadership. Unlike in models with leapfrogging, granting forward protection, and imposing a non-obviousness requirement reduces growth. In the main case where entrants and incumbents have free access to the same R&D technology, infinite protection against imitation, granted independently of the size of the lead, maximizes growth. If entrants have to engage in costly catch up before they can undertake frontier R&D, growth is maximal for a finite (expected) length of protection against imitation.

Suggested Citation

  • Kiedaisch, Christian, 2015. "Intellectual property rights in a quality-ladder model with persistent leadership," European Economic Review, Elsevier, vol. 80(C), pages 194-213.
  • Handle: RePEc:eee:eecrev:v:80:y:2015:i:c:p:194-213
    DOI: 10.1016/j.euroecorev.2015.09.005
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    References listed on IDEAS

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    Cited by:

    1. Tatsuro Iwaisako & Kazuyoshi Ohki, 2019. "Innovation by Heterogeneous Leaders," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(4), pages 1673-1704, October.
    2. Kiedaisch, Christian & Grafenhofer, Dominik, 2013. "Taste for Exclusivity and Intellectual Property Rights," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80017, Verein für Socialpolitik / German Economic Association.
    3. repec:eee:respol:v:47:y:2018:i:8:p:1538-1552 is not listed on IDEAS
    4. Chu, Angus C. & Cozzi, Guido & Pan, Shiyuan & Zhang, Mengbo, 2016. "Do Stronger Patents Stimulate or Stifle Innovation? The Crucial Role of Financial Development," MPRA Paper 73630, University Library of Munich, Germany.
    5. repec:red:issued:17-109 is not listed on IDEAS
    6. Tubadji, Annie & Nijkamp, Peter & Santarelli, Enrico, 2017. "Shacklean Uncertainty and Cultural Embeddedness as Innovation Constraints in the UK," GLO Discussion Paper Series 111, Global Labor Organization (GLO).
    7. Angus Chu & Guido Cozzi, 2018. "Effects of Patents versus R&D subsidies on Income Inequality," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 29, pages 68-84, July.

    More about this item

    Keywords

    Intellectual property rights; Cumulative innovation; Persistent leadership; Forward protection; Non-obviousness requirement;

    JEL classification:

    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • 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

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