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Patents RD subsidies and endogenous market structure in a Schumpeterian economy

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  • Angus C.Chu

    (University of Liverpool United Kingdom)

  • Yuichi Furukawa

    (Chukyo University Japan)

  • Lei Ji

    (Shanghai University of finance and economics China)

Abstract

This study explores the different implications of patent breadth and RD subsidies on economic growth and endogenous market structure in a Schumpeterian growth model. We fend that when the number of firms is fixed in the short run, patent breadth and R&D subsidies serve to increase economic growth as in previous studies. However, when the number of firms adjusts endogenously in the long run, RD subsidies increase economic growth but decrease the number of firms,whereas patent breadth expands the number of firms but reduces economic growth. Therefore, RD subsidy is perhaps a more suitable policy instrument than patent breadth for the purpose of stimulating long-run economic growth.

Suggested Citation

  • Angus C.Chu & Yuichi Furukawa & Lei Ji, 2013. "Patents RD subsidies and endogenous market structure in a Schumpeterian economy," Documents de Travail de l'OFCE 2013-19, Observatoire Francais des Conjonctures Economiques (OFCE).
    • Handle: RePEc:fce:doctra:1319
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    2. Ken Tabata, 2021. "Redistributive Policy and R&D-based Growth," Discussion Paper Series 227, School of Economics, Kwansei Gakuin University.
    3. Nguyen, Canh Phuc & Doytch, Nadia, 2022. "The impact of ICT patents on economic growth: An international evidence," Telecommunications Policy, Elsevier, vol. 46(5).
    4. He, Qichun, 2018. "Inflation and Fertility in a Schumpeterian Growth Model: Theory and Evidence," MPRA Paper 85074, University Library of Munich, Germany.
    5. Chen, Ping-ho & Chu, Angus C. & Chu, Hsun & Lai, Ching-chong, 2017. "Short-run and long-run effects of capital taxation on innovation and economic growth," Journal of Macroeconomics, Elsevier, vol. 53(C), pages 207-221.
    6. Chu, Angus C. & Kou, Zonglai & Wang, Xilin, 2019. "Effects of Patents on the Industrial Revolution," MPRA Paper 91819, University Library of Munich, Germany.
    7. Angus C. Chu & Yuichi Furukawa & Sushanta Mallick & Pietro Peretto & Xilin Wang, 2021. "Dynamic effects of patent policy on innovation and inequality in a Schumpeterian economy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(4), pages 1429-1465, June.
    8. Chen, Ping-ho & Chu, Hsun & Lai, Ching-Chong, 2015. "Do R&D subsidies necessarily stimulate economic growth?," MPRA Paper 66061, University Library of Munich, Germany.
    9. Michael Klein & Fuat Sener, 2023. "Product Innovation, Diffusion and Endogenous Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 48, pages 178-201, April.
    10. Rudra Narayan Kushwaha & Taniya Ghosh, 2023. "The Effects of population growth on patents and economic growth dynamics," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2023-05, Indira Gandhi Institute of Development Research, Mumbai, India.
    11. O'Shaughnessy, Eric, 2022. "How policy has shaped the emerging solar photovoltaic installation industry," Energy Policy, Elsevier, vol. 163(C).
    12. Angus C. Chu, 2022. "Patent policy and economic growth: A survey," Manchester School, University of Manchester, vol. 90(2), pages 237-254, March.
    13. Chu, Angus C. & Cozzi, Guido & Furukawa, Yuichi & Liao, Chih-Hsing, 2018. "Should the Government Subsidize Innovation or Automation?," MPRA Paper 88276, University Library of Munich, Germany.
    14. Julius Tan Gonzales, 2023. "Implications of AI innovation on economic growth: a panel data study," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 12(1), pages 1-37, December.
    15. Chu, Angus C. & Wang, Xilin, 2022. "Effects Of R&D Subsidies In A Hybrid Model Of Endogenous Growth And Semi-Endogenous Growth," Macroeconomic Dynamics, Cambridge University Press, vol. 26(3), pages 813-832, April.

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    More about this item

    Keywords

    economic growth; endogenous market structure; patents rd subsidies;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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