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Economic Growth with Imperfect Protection of Intellectual Property Rights

  • Ryo Horii

    (Osaka University)

  • Tatsuro Iwaisako

    (Ritsumeikan University)

The growth effects of intellectual property right (IPR) protection are examined in a quality-ladder model of endogenous growth. Stronger IPR protection, which reduces the probability of imitation, raises the reward for innovation. However, stronger protection reduces the number of competitive sectors, in which it is easier to innovate than in monopolistic sectors, thus concentrating researchers into fewer competitive sectors. As R&D projects take time until they are completed, concentration of R&D activity in a field raises the possibility of duplication of innovation, thereby hindering growth. In several settings, we show that imperfect, rather than perfect, protection maximizes growth.

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Paper provided by EconWPA in its series Development and Comp Systems with number 0508001.

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Length: 37 pages
Date of creation: 03 Aug 2005
Date of revision:
Handle: RePEc:wpa:wuwpdc:0508001
Note: Type of Document - pdf; pages: 37
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