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Growth Effects Of Nonproprietary Innovation

Author

Listed:
  • Gilles Saint-Paul

    (IDEI, GREMAQ, LEERNA, Université des Sciences Sociales de Toulouse, CEPR, IZA, and CESIfo,)

Abstract

We study an endogenous growth model where a profit-motivated R and D sector coexists with the introduction of free blueprints invented by philanthropists. These goods are priced at marginal cost, contrary to proprietary ones which are produced by a monopoly owned by the inventor. We show that philanthropy does not necessarily increase long-run growth and that it may even reduce welfare. The reason is that it crowds out proprietary innovation which on net may reduce total innovation in the long run. These effects would be reinforced if philanthropical innovation diverted people from other productive activities, if free goods were less taylored to customers than proprietary ones, and if philanthropical inventors sometimes came out with another version of an existing proprietary good. Dynamics can also be characterized and it is shown that the impact effect of free inventions on growth is positive. (JEL: L12, L13, L16, L86, O31, O32, O34) Copyright (c) 2003 The European Economic Association.

Suggested Citation

  • Gilles Saint-Paul, 2003. "Growth Effects Of Nonproprietary Innovation," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 429-439, 04/05.
  • Handle: RePEc:tpr:jeurec:v:1:y:2003:i:2-3:p:429-439
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    Cited by:

    1. Engelhardt, Sebastian v. & Freytag, Andreas, 2013. "Institutions, culture, and open source," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 90-110.
    2. Josh Lerner & Jean Tirole, 2005. "The Economics of Technology Sharing: Open Source and Beyond," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 99-120, Spring.
    3. Joachim Henkel & Eric von Hippel, 2005. "Welfare Implications of User Innovation," The Journal of Technology Transfer, Springer, vol. 30(2_2), pages 73-87, January.
    4. Alireza Naghavi & Chiara Strozzi, 2011. "Intellectual Property Rights, Migration, and Diaspora," Working Papers 2011.60, Fondazione Eni Enrico Mattei.
    5. Joseph Zeira, 2011. "Innovations, patent races and endogenous growth," Journal of Economic Growth, Springer, vol. 16(2), pages 135-156, June.
    6. Auriol, Emmanuelle & Biancini, Sara, 2009. "Intellectual Property Rights Adoption in Developing Countries," TSE Working Papers 09-094, Toulouse School of Economics (TSE).
    7. repec:bla:glopol:v:8:y:2017:i:2:p:135-148 is not listed on IDEAS
    8. Paola Giuri & Gaia Rocchetti & Salvatore Torrisi, 2002. "Open Source Software: From Open Science to New Marketing Models," LEM Papers Series 2002/23, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

    More about this item

    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • 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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