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R&D Spillovers, Innovation, and Entry

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  • Khazabi, Massoud
  • Quyen, Nguyen

Abstract

The paper extends a theoratical framework to analyze the impact of R&D spillovers on entry and the resulting equilibrium market structure. It is shown that the degree of spillovers plays a fundamental role on the number of firms entering the market, their R&D activities, and social welfare. The analysis suggests that social welfare is maximized at some intermediate degree of spillovers. The policy implication of this result is that neither complete protection of intellectual property right nor lax enforcement of patent laws is socially optimal.

Suggested Citation

  • Khazabi, Massoud & Quyen, Nguyen, 2011. "R&D Spillovers, Innovation, and Entry," MPRA Paper 39460, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:39460
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    File URL: https://mpra.ub.uni-muenchen.de/39460/1/MPRA_paper_39460.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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