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Economic Growth with Imperfect Protection of Intellectual Property Rights

  • Ryo Horii

    ()

    (Graduate School of Economics, Osaka University)

  • Tatsuro Iwaisako

    ()

    (Faculty of Economics, Ritsumeikan University)

This paper examines the growth effects of intellectual property right (IPR) protection in a quality-ladder model of endogenous growth. Stronger IPR protection, which reduces the imitation probability, increases the reward for innovation. However, stronger protection also gradually reduces the number of competitive sectors, in which innovation is easier than in monopolistic sectors. With free entry to R&D, the number of researchers in each remaining competitive sector increases, but the concentration of R&D activity raises the possibility of unnecessary duplication of innovation, thereby hindering growth. Consequently, imperfect rather than perfect protection maximizes growth. Welfare and scale effects are also examined.

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File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/0523R.pdf
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Paper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 05-23-Rev..

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Length: 45 pages
Date of creation: Aug 2005
Date of revision: Apr 2006
Handle: RePEc:osk:wpaper:0523r
Contact details of provider: Web page: http://www.econ.osaka-u.ac.jp/
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