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Patents RD subsidies and endogenous market structure in a Schumpeterian economy

  • Angus C.Chu

    ()

    (University of Liverpool United Kingdom)

  • Yuichi Furukawa

    ()

    (Chukyo University Japan)

  • Lei Ji

    ()

    (Shanghai University of finance and economics China)

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.

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File URL: http://www.ofce.sciences-po.fr/pdf/dtravail/WP2013-19.pdf
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Paper provided by Observatoire Francais des Conjonctures Economiques (OFCE) in its series Documents de Travail de l'OFCE with number 2013-19.

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Date of creation: Sep 2013
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Handle: RePEc:fce:doctra:1319
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  1. Furukawa, Yuichi, 2010. "Intellectual property protection and innovation: an inverted-U relationship," Economics Letters, Elsevier, vol. 109(2), pages 99-101, November.
  2. Chu, Angus C., 2011. "The welfare cost of one-size-fits-all patent protection," Journal of Economic Dynamics and Control, Elsevier, vol. 35(6), pages 876-890, June.
  3. repec:cup:cbooks:9780521879286 is not listed on IDEAS
  4. Chu, Angus C. & Cozzi, Guido & Galli, Silvia, 2010. "Does intellectual monopoly stimulate or stifle innovation?," MPRA Paper 31019, University Library of Munich, Germany, revised May 2011.
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  10. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
  11. Joonkyung Ha & Peter Howitt, 2007. "Accounting for Trends in Productivity and R&D: A Schumpeterian Critique of Semi-Endogenous Growth Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(4), pages 733-774, 06.
  12. Jakob B. Madsen & EPRU & FRU, 2007. "Semi-Endogenous Versus Schumpeterian Growth Models: Testing The Knowledge Production Function Using International Data," Monash Economics Working Papers 26-07, Monash University, Department of Economics.
  13. Peretto, Pietro F., 1996. "Technological Change and Population Growth," Working Papers 96-28, Duke University, Department of Economics.
  14. Pietro Peretto & Michelle Connolly, 2007. "The Manhattan Metaphor," Journal of Economic Growth, Springer, vol. 12(4), pages 329-350, December.
  15. Ai-Ting Goh & Jacques Olivier, 2002. "Optimal Patent Protection in a Two-Sector Economy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1191-1214, November.
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  18. Richard Gilbert and Carl Shapiro., 1989. "Optimal Patent Length and Breadth," Economics Working Papers 89-102, University of California at Berkeley.
  19. Chu, Angus C. & Furukawa, Yuichi, 2011. "On the optimal mix of patent instruments," Journal of Economic Dynamics and Control, Elsevier, vol. 35(11), pages 1964-1975.
  20. Tatsuro Iwaisako & Koichi Futagami, 2013. "Patent protection, capital accumulation, and economic growth," Economic Theory, Springer, vol. 52(2), pages 631-668, March.
  21. Peretto, Pietro F., 1995. "Sunk Costs, Market Structure, and Growth," Working Papers 95-34, Duke University, Department of Economics.
  22. Alwyn Young, 1998. "Growth without Scale Effects," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 41-63, February.
  23. Angus C. Chu & Guido Cozzi & Silvia Galli, 2009. "Innovation-Specific Patent Protection," IEAS Working Paper : academic research 09-A010, Institute of Economics, Academia Sinica, Taipei, Taiwan, revised 03 Dec 2009.
  24. Furukawa, Yuichi, 2007. "The protection of intellectual property rights and endogenous growth: Is stronger always better?," Journal of Economic Dynamics and Control, Elsevier, vol. 31(11), pages 3644-3670, November.
  25. Pietro F. Peretto, 2005. "Corporata Taxes, Growth and Welfare in a Schumpeterian Economy," 2005 Meeting Papers 653, Society for Economic Dynamics.
  26. Chu, Angus C. & Pan, Shiyuan & Sun, Minjuan, 2012. "When does elastic labor supply cause an inverted-U effect of patents on innovation?," Economics Letters, Elsevier, vol. 117(1), pages 211-213.
  27. Angus Chu, 2009. "Effects of blocking patents on R&D: a quantitative DGE analysis," Journal of Economic Growth, Springer, vol. 14(1), pages 55-78, March.
  28. James Bessen & Michael J. Meurer, 2008. "Introduction to Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk
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  29. Josh Lerner, 2009. "The Empirical Impact of Intellectual Property Rights on Innovation: Puzzles and Clues," American Economic Review, American Economic Association, vol. 99(2), pages 343-48, May.
  30. Segerstrom, Paul S & Anant, T C A & Dinopoulos, Elias, 1990. "A Schumpeterian Model of the Product Life Cycle," American Economic Review, American Economic Association, vol. 80(5), pages 1077-91, December.
  31. Christopher Laincz & Pietro Peretto, 2006. "Scale effects in endogenous growth theory: an error of aggregation not specification," Journal of Economic Growth, Springer, vol. 11(3), pages 263-288, September.
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