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Incentives for product and process innovations: a case for the drug industry

Listed author(s):
  • Bhan, Aditya
  • Kabiraj, Tarun
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    We consider an interaction of competing firms in an integrated world market and study their R&D incentives under each of product patent and process patent regimes. We follow a framework generally observed in the drug industry. We show that product patent regime leads to a larger R&D investment. Consumers may also benefit from product patenting. However, if the number of goods is large enough, the choice of patent regime loses significance with respect to R&D incentives.

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    File URL: https://mpra.ub.uni-muenchen.de/61030/1/MPRA_paper_61030.pdf
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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 61030.

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    Date of creation: 15 Dec 2014
    Handle: RePEc:pra:mprapa:61030
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    1. Diwan, Ishac & Rodrik, Dani, 1991. "Patents, appropriate technology, and North-South trade," Journal of International Economics, Elsevier, vol. 30(1-2), pages 27-47, February.
    2. Michael Fritsch & Monika Meschede, 2001. "Product Innovation, Process Innovation, and Size," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 19(3), pages 335-350, November.
    3. Deardorff, A.V, 1990. "Should Patent Protection Be Extended To All Countries?," Working Papers 259, Research Seminar in International Economics, University of Michigan.
    4. Alan V. Deardorff, 1990. "Should Patent Protection Be Extended to All Developing Countries?," The World Economy, Wiley Blackwell, vol. 13(4), pages 497-508, December.
    5. repec:fth:michin:259 is not listed on IDEAS
    6. Cohen, Wesley M & Klepper, Steven, 1996. "Firm Size and the Nature of Innovation within Industries: The Case of Process and Product R&D," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 232-243, May.
    7. Yong Yang, 1998. "Why Do Southern Countries Have Little Incentive to Protect Northern Intellectual Property Rights?," Canadian Journal of Economics, Canadian Economics Association, vol. 31(4), pages 800-816, November.
    8. Greenaway, David & Sapir, Andre, 1992. "New issues in the Uruguay round : Services, TRIMs and TRIPs," European Economic Review, Elsevier, vol. 36(2-3), pages 509-518, April.
    9. Marjit, Sugata & Beladi, Hamid, 1998. "Product Versus Process Patents: A Theoretical Approach," Journal of Policy Modeling, Elsevier, vol. 20(2), pages 193-199, April.
    10. Sakakibara, Mariko & Branstetter, Lee, 2001. "Do Stronger Patents Induce More Innovation? Evidence from the 1988 Japanese Patent Law Reforms," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 77-100, Spring.
    11. Mathew, Anuj Joshua & Mukherjee, Arijit, 2014. "Intellectual property rights, southern innovation and foreign direct investment," International Review of Economics & Finance, Elsevier, vol. 31(C), pages 128-137.
    12. Swapnendu Banerjee & Tarun Kabiraj, 2008. "Optimal Patent Length in a North-South Framework," Working Papers id:1322, eSocialSciences.
    13. Subramanian, Arvind, 1991. "The international economics of intellectual property right protection: A welfare-theoretic trade policy analysis," World Development, Elsevier, vol. 19(8), pages 945-956, August.
    14. Keith E. Maskus, 1990. "Normative Concerns in the International Protection of Intellectual Property Rights," The World Economy, Wiley Blackwell, vol. 13(3), pages 387-409, September.
    15. Arijit Mukherjee & Achintya Ray, 2007. "Patents, imitation and welfare," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 16(3), pages 227-236.
    16. Arijit Mukherjee & Uday Bhanu Sinha, 2013. "Patent Protection, Southern Innovation and Welfare in a North–South Trade Model," Economica, London School of Economics and Political Science, vol. 80(318), pages 248-273, April.
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