IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

Intellectual property rights, technical progress and the volatility of economic growth

Listed author(s):
  • Chu, Angus C.
  • Leung, Charles K.Y.
  • Tang, Edward

In this note, we analyze the effects of intellectual property rights on the volatility of economic growth. Our analysis is motivated by the observation that the strengthening of patent protection and the increase in R&D in the US coincide with a reduction in growth volatility beginning in the mid 1980s. To analyze this phenomenon, we develop an R&D-based growth model with aggregate uncertainty in the innovation process and apply the model to ask whether increasing patent strength and R&D can lead to a significant reduction in growth volatility. We find a small but non-negligible effect that explains no less than 10% of the observed reduction in growth volatility in the US.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/pii/S0164070412000511
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Journal of Macroeconomics.

Volume (Year): 34 (2012)
Issue (Month): 3 ()
Pages: 749-756

as
in new window

Handle: RePEc:eee:jmacro:v:34:y:2012:i:3:p:749-756
DOI: 10.1016/j.jmacro.2012.04.002
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622617

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window

  1. Greenwood, J. & Jovanovic, B., 1988. "Financial Development, Growth, And The Distribution Of Income," RCER Working Papers 131, University of Rochester - Center for Economic Research (RCER).
  2. O'Donoghue, Edward & Zweimüller, Josef, 1998. "Patents in a Model of Endogenous Growth," CEPR Discussion Papers 1951, C.E.P.R. Discussion Papers.
  3. Acemoglu, Daron & Zilibotti, Fabrizio, 1996. "Was Prometheus Unbound by Chance? Risk, Diversification and Growth," CEPR Discussion Papers 1426, C.E.P.R. Discussion Papers.
  4. Bernstein, Jeffrey I & Nadiri, M Ishaq, 1988. "Interindustry R&D Spillovers, Rates of Return, and Production in High-Tech Industries," American Economic Review, American Economic Association, vol. 78(2), pages 429-434, May.
  5. Chu, Angus C., 2007. "Optimal Patent Breadth: Quantifying the Effects of Increasing Patent Breadth," MPRA Paper 3910, University Library of Munich, Germany.
  6. Ryo Horii & Tatsuro Iwaisako, 2005. "Economic Growth with Imperfect Protection of Intellectual Property Rights," Development and Comp Systems 0508001, EconWPA.
  7. Miklos Koren & Silvana Tenreyro, 2005. "Volatility and Development," CEP Discussion Papers dp0706, Centre for Economic Performance, LSE.
  8. Cozzi, Guido & Giordani, Paolo E. & Zamparelli, Luca, 2007. "The refoundation of the symmetric equilibrium in Schumpeterian growth models," Journal of Economic Theory, Elsevier, vol. 136(1), pages 788-797, September.
  9. Futagami, Koichi & Iwaisako, Tatsuro, 2007. "Dynamic analysis of patent policy in an endogenous growth model," Journal of Economic Theory, Elsevier, vol. 132(1), pages 306-334, January.
  10. Ramey, Garey & Ramey, Valerie A, 1995. "Cross-Country Evidence on the Link between Volatility and Growth," American Economic Review, American Economic Association, vol. 85(5), pages 1138-1151, December.
  11. Aghion, Philippe & Banerjee, Abhijit, 2005. "Volatility and Growth," OUP Catalogue, Oxford University Press, number 9780199248612.
  12. Chu, Angus C. & Furukawa, Yuichi, 2010. "On the optimal mix of patent instruments," MPRA Paper 24039, University Library of Munich, Germany.
  13. Tang, Sam Hak Kan, 2002. "The link between growth volatility and technical progress: cross-country evidence," Economics Letters, Elsevier, vol. 77(3), pages 335-341, November.
  14. Chu, Angus C., 2009. "The welfare cost of one-size-fit-all patent protection," MPRA Paper 21401, University Library of Munich, Germany, revised Mar 2010.
  15. Furukawa, Yuichi, 2010. "Intellectual property protection and innovation: an inverted-U relationship," Economics Letters, Elsevier, vol. 109(2), pages 99-101, November.
  16. Daron Acemoglu & Ufuk Akcigit, 2012. "Intellectual Property Rights Policy, Competition And Innovation," Journal of the European Economic Association, European Economic Association, vol. 10(1), pages 1-42, 02.
  17. Charles Ka-Yui Leung & Sam Hak Kan Tang & Nicolaas Groenewold, 2005. "Growth volatility and technical progress: a simple rent-seeking model," Discussion Papers 00016, Chinese University of Hong Kong, Department of Economics.
  18. Sunil Kanwar & Robert Evenson, 2001. "Does Intellectual Property Protection Spur Technological Change," Working Papers 831, Economic Growth Center, Yale University.
  19. Chu, Angus C. & Peng, Shin-Kun, 2011. "International intellectual property rights: Effects on growth, welfare and income inequality," Journal of Macroeconomics, Elsevier, vol. 33(2), pages 276-287, June.
  20. Angus Chu, 2010. "Effects of patent length on R&D: a quantitative DGE analysis," Journal of Economics, Springer, vol. 99(2), pages 117-140, March.
  21. Chu, Angus C., 2007. "Economic Growth and Patent Policy: Quantifying the Effects of Patent Length on R&D and Consumption," MPRA Paper 5476, University Library of Munich, Germany.
  22. Horowitz, Andrew W & Lai, Edwin L-C, 1996. "Patent Length and the Rate of Innovation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(4), pages 785-801, November.
  23. Park, Walter G., 2008. "International patent protection: 1960-2005," Research Policy, Elsevier, vol. 37(4), pages 761-766, May.
  24. Cozzi, Guido & Spinesi, Luca, 2006. "Intellectual Appropriability, Product Differentiation, And Growth," Macroeconomic Dynamics, Cambridge University Press, vol. 10(01), pages 39-55, February.
  25. Cozzi Guido, 2007. "The Arrow Effect under Competitive R&D," The B.E. Journal of Macroeconomics, De Gruyter, vol. 7(1), pages 1-20, January.
  26. Spinesi Luca, 2011. "Probabilistic Heterogeneous Patent Protection and Innovation Incentives," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-44, August.
  27. Gene M. Grossman & Elhanan Helpman, 1989. "Quality Ladders in the Theory of Growth," NBER Working Papers 3099, National Bureau of Economic Research, Inc.
  28. Sorek, Gilad, 2011. "Patents and quality growth in OLG economy," Journal of Macroeconomics, Elsevier, vol. 33(4), pages 690-699.
  29. John Laitner & Dmitriy Stolyarov, 2013. "Derivative Ideas And The Value Of Intangible Assets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(1), pages 59-95, 02.
  30. Kwan, Yum K. & Lai, Edwin L. -C., 2003. "Intellectual property rights protection and endogenous economic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 27(5), pages 853-873, March.
  31. Chu, Angus C. & Peng, Shin-Kun, 2008. "Effects of TRIPS on Growth, Welfare and Income Inequality in an R&D-Growth Model," MPRA Paper 10956, University Library of Munich, Germany.
  32. Judd, Kenneth L, 1985. "On the Performance of Patents," Econometrica, Econometric Society, vol. 53(3), pages 567-585, May.
  33. Tang, Sam Hak Kan & Groenewold, Nicolaas & Leung, Charles Ka Yui, 2008. "The link between institutions, technical change and macroeconomic volatility," Journal of Macroeconomics, Elsevier, vol. 30(4), pages 1520-1549, December.
  34. Bernstein, Jeffrey I. & Nadiri, M. Ishaq, 1988. "Research and Development and Intraindustry Spillovers: An Empirical Application of Dynamic Duality," Working Papers 88-06, C.V. Starr Center for Applied Economics, New York University.
  35. Cozzi, Guido, 2001. "Inventing or Spying? Implications for Growth," Journal of Economic Growth, Springer, vol. 6(1), pages 55-77, March.
  36. Ginarte, Juan C. & Park, Walter G., 1997. "Determinants of patent rights: A cross-national study," Research Policy, Elsevier, vol. 26(3), pages 283-301, October.
  37. Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, vol. 82(5), pages 1293-1306, December.
  38. Maggie Xiaoyang Chen & Murat Iyigun, 2010. "Patent Protecton and Strategic Delays in Technology Development: Implications for Econonmic Growth," Working Papers 2010-19, The George Washington University, Institute for International Economic Policy.
  39. Been-Lon Chen & Angus Chu, 2010. "On R&D spillovers, multiple equilibria and indeterminacy," Journal of Economics, Springer, vol. 100(3), pages 247-263, July.
  40. Furukawa, Yuichi, 2007. "The protection of intellectual property rights and endogenous growth: Is stronger always better?," Journal of Economic Dynamics and Control, Elsevier, vol. 31(11), pages 3644-3670, November.
  41. Tatsuro Iwaisako & Koichi Futagami, 2013. "Patent protection, capital accumulation, and economic growth," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 52(2), pages 631-668, March.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:jmacro:v:34:y:2012:i:3:p:749-756. 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: (Dana Niculescu)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.