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Competition, Imitation, and R&D Productivity in a Growth Model with Sector-Specific Patent Protection

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  • Malte Mosel

Abstract

Recent empirical studies suggest a need for a flexible patent regime responding to industry characteristics. In practice, sector-specific modifications of patent strength already exist but lack theoretical foundation. This paper intends to make up for this neglect by scrutinizing in what direction industry characteristics influence optimal patent strength. It is found that patents ought to be weaker, the more intense competition, the higher R&D productivity, and the more intricate reverse engineering are. Unlike similar step-by-step innovation models of economic growth, the model assumes Cournot competition and introduces an empirically substantiated measure of sector differences in the ability to catch up with the technological leader. It is found that for most empirically plausible cases the familiar inverted-U relation between patent length and growth carries over to the Cournot set-up.

Suggested Citation

  • Malte Mosel, 2010. "Competition, Imitation, and R&D Productivity in a Growth Model with Sector-Specific Patent Protection," CESifo Working Paper Series 3109, CESifo.
    • Handle: RePEc:ces:ceswps:_3109
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    References listed on IDEAS

    as
    1. Winfried Koeniger & Omar Licandro, "undated". "Substitutability and Competition in the Dixit-Stiglitz Model," Working Papers 2004-06, FEDEA.
    2. Ted O'Donoghue & Suzanne Scotchmer & Jacques‐François Thisse, 1998. "Patent Breadth, Patent Life, and the Pace of Technological Progress," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(1), pages 1-32, March.
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    Cited by:

    1. Tom-Reiel Heggedal, 2015. "Knowledge spillovers and R&D subsidies to new, emerging technologies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 24(7), pages 710-733, October.
    2. Yu-Fu Chen & Michael Funke, 2010. "Global Warming And Extreme Events: Rethinking The Timing And Intensity Of Environmental Policy," Dundee Discussion Papers in Economics 236, Economic Studies, University of Dundee.

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    More about this item

    Keywords

    competition; imitation; innovation; Schumpeterian growth; sector-specific patent protection; Supplementary Protection Certificates;
    All these keywords.

    JEL classification:

    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • 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
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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