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Status Preference and the Effects of Patent Protection: Theory and Evidence

  • Shiyuan Pan

    (Center for Research of Private Economy and School of Economics, Zhejiang University)

  • Mengbo Zhang

    (School of Economics, Zhejiang University)

  • Heng-fu Zou

    (Central University of Finance and Economics CEMA)

We build a growth model with status preference to explore the effects of patent protection on innovation and social welfare. The main results are as follows. There exists a non-monotonic relationship between patent protection and innovation, and the growth-rate-maximizing degree of patent protection decreases with the strength of status preference. Moreover, the effect of patent protection on social welfare is ambiguous, depending on the strength of status preference. Finally, a cross-section regression based on a cross-country dataset is employed to investigate the empirical evidence of our theory. A significantly non-monotonic relationship between patent protection and economic growth is found when the status preference is considered.

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Paper provided by China Economics and Management Academy, Central University of Finance and Economics in its series CEMA Working Papers with number 588.

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Length: 39 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:cuf:wpaper:588
Contact details of provider: Web page: http://cema.cufe.edu.cn/

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