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Patent policy, investment and social welfare

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  • Bergin, James

Abstract

This paper considers patent policy in an environment where firms are heterogeneous, differentiated by their technologies, and where the impact of policy varies across firms. More stringent (restrictive) patent policy reduces access to patented knowledge and affects both profitability and the innovation performance of a firm. This in turn changes a firm’s incentives to invest in innovation. The paper studies circumstances where, comparing two firms where one has a technology weaker than the other (ranked lower in the technology comparison), the impact on the technologically weaker firm of such policy is either more or less severe than on the strong firm. In each case the consequence for investment in innovation is examined. The welfare implications of such policies are also considered. One feature of the paper is that the formulation allows for a broad and multidimensional description of technologies.

Suggested Citation

  • Bergin, James, 2018. "Patent policy, investment and social welfare," International Journal of Industrial Organization, Elsevier, vol. 61(C), pages 439-458.
    • Handle: RePEc:eee:indorg:v:61:y:2018:i:c:p:439-458
    DOI: 10.1016/j.ijindorg.2018.08.007
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Patents; Investment; Innovation; Welfare;
    All these keywords.

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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