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Patentability and Knowledge Spillovers of Basic R&D

Author

Listed:
  • Angus C. Chu

    () (Durham University Business School, Durham University, Durham, UK; and School of Economics, Shanghai University of Finance and Economics, Shanghai, China)

  • Yuichi Furukawa

    () (School of Economics, Chukyo University, Nagoya, Japan; and Department of Economics, Simon Fraser University, Burnaby, Canada; corresponding author)

Abstract

This study develops a research and development (R&D)–based growth model with basic and applied research to analyze the growth and welfare effects of two patent instruments: (i) the patentability of basic R&D and (ii) the division of profit between basic and applied researchers. We find that for the purpose of stimulating basic R&D and economic growth simultaneously, increasing the share of profit assigned to basic researchers is more effective than raising the patentability of basic R&D, which has either a negative effect or an inverted-U effect on technological progress. However, a benevolent patent authority requires both patent instruments to achieve the socially optimal allocation in the decentralized economy.

Suggested Citation

  • Angus C. Chu & Yuichi Furukawa, 2013. "Patentability and Knowledge Spillovers of Basic R&D," Southern Economic Journal, Southern Economic Association, vol. 79(4), pages 928-945, April.
  • Handle: RePEc:sej:ancoec:v:79:4:y:2013:p:928-945
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    File URL: http://dx.doi.org/10.4284/0038-4038-2011.207
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    References listed on IDEAS

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    1. Cozzi, Guido, 2001. "Inventing or Spying? Implications for Growth," Journal of Economic Growth, Springer, vol. 6(1), pages 55-77, March.
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    Citations

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    Cited by:

    1. Yang, Xuebing, 2013. "Horizontal inventive step and international protection of intellectual property," International Review of Economics & Finance, Elsevier, vol. 25(C), pages 338-355.
    2. Tanaka, Hitoshi & Iwaisako, Tatsuro, 2014. "Intellectual property rights and foreign direct investment: A welfare analysis," European Economic Review, Elsevier, vol. 67(C), pages 107-124.
    3. Kunihiko Konishi, 2015. "Basic and Applied Research: A Welfare Analysis," Discussion Papers in Economics and Business 15-08, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
    4. Tian, Xian-Liang, 2017. "Sector-specific IPR protection to overcome technology-skill mismatch in South? A simple model," Mathematical Social Sciences, Elsevier, vol. 85(C), pages 44-51.
    5. Furukawa, Yuichi & Lai, Tat-kei & Sato, Kenji, 2017. "Receptivity and Innovation," MPRA Paper 81536, University Library of Munich, Germany.
    6. Tatsuro Iwaisako, 2017. "Welfare Effects of Patent Protection in a Semi-Endogenous Growth Model," Discussion Papers in Economics and Business 17-27, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).

    More about this item

    JEL classification:

    • 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
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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