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Welfare effects of patent protection and productive public services: why do developing countries prefer weaker patent protection?

  • Tatsuro Iwaisako

    ()

    (Graduate School of Economics, Osaka University)

This paper examines the welfare-maximizing degree of patent protection in a growth model where the engines of economic growth are R&D and public services. We find that an increase in public services enhances the positive and negative effects of strengthening patent protection on R&D and the volume of production, respectively. However, if public services are relatively small, the negative welfare effect associated with the decrease in production volume tends to outweigh the positive welfare effect from the increase in the growth rate, and so the welfare-maximizing degree of patent protection tends to be lower. This result provides one possible explanation for why developing countries tend to prefer weaker patent protection.

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File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/1219.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 12-19.

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Length: 16 pages
Date of creation: Dec 2012
Date of revision:
Handle: RePEc:osk:wpaper:1219
Contact details of provider: Web page: http://www.econ.osaka-u.ac.jp/
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  1. Angus C. Chu & Guido Cozzi & Silvia Galli, 2011. "Innovating Like China: a Theory of Stage-Dependent Intellectual Property Rights," Working Papers 2011_14, Durham University Business School.
  2. Hitoshi Tanaka & Tatsuro Iwaisako & Koichi Futagami, 2009. "A Welfare Analysis of Global Patent Protection in a Model with Endogenous Innovation and Foreign Direct Investment," Discussion Papers in Economics and Business 09-24, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  3. Tatsuro Iwaisako & Koichi Futagami, 2013. "Patent protection, capital accumulation, and economic growth," Economic Theory, Springer, vol. 52(2), pages 631-668, March.
  4. Park, Walter G., 2008. "International patent protection: 1960-2005," Research Policy, Elsevier, vol. 37(4), pages 761-766, May.
  5. Ryo Horii & Tatsuro Iwaisako, 2007. "Economic Growth with Imperfect Protection of Intellectual Property Rights," Journal of Economics, Springer, vol. 90(1), pages 45-85, January.
  6. Robert J. Barro, 1988. "Government Spending in a Simple Model of Endogenous Growth," NBER Working Papers 2588, National Bureau of Economic Research, Inc.
  7. Gene M. Grossman & Edwin L.-C. Lai, 2004. "International Protection of Intellectual Property," American Economic Review, American Economic Association, vol. 94(5), pages 1635-1653, December.
  8. Eicher, Theo & García-Peñalosa, Cecilia, 2008. "Endogenous strength of intellectual property rights: Implications for economic development and growth," European Economic Review, Elsevier, vol. 52(2), pages 237-258, February.
  9. Luis A. Rivera-Batiz & Paul M. Romer, 1990. "Economic Integration and Endogenous Growth," NBER Working Papers 3528, National Bureau of Economic Research, Inc.
  10. 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.
  11. Hitoshi Tanaka & Tatsuro Iwaisako, 2013. "Intellectual Property Rights and Foreign Direct Investment: A Welfare Analysis," Discussion Papers in Economics and Business 13-15-Rev, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP), revised Nov 2013.
  12. Iwaisako, Tatsuro, 2013. "Welfare effects of patent protection and productive public services: Why do developing countries prefer weaker patent protection?," Economics Letters, Elsevier, vol. 118(3), pages 478-481.
  13. Gangopadhyay, Kausik & Mondal, Debasis, 2012. "Does stronger protection of intellectual property stimulate innovation?," Economics Letters, Elsevier, vol. 116(1), pages 80-82.
  14. 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.
  15. 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.
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