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Intellectual property rights in a quality-ladder model with persistent leadership

Listed author(s):
  • Christian Kiedaisch

This article analyzes the effects of intellectual property rights in a quality-ladder model in which incumbent firms preemptively innovate in order to keep their position of leadership. Unlike in models with leapfrogging, granting non-expiring forward protection reduces the rate of innovation and imposing a non-obviousness requirement reduces R&D spending. It is shown that full protection against imitation, granted independently of the size of the lead, maximizes the average innovation rate.

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File URL: http://www.econ.uzh.ch/static/wp/econwp078.pdf
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Paper provided by Department of Economics - University of Zurich in its series ECON - Working Papers with number 078.

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Date of creation: May 2012
Handle: RePEc:zur:econwp:078
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  1. Vincenzo Denicolò & Piercarlo Zanchettin, 2014. "What Causes Over‐investment in R&D in Endogenous Growth Models?," Economic Journal, Royal Economic Society, vol. 124(581), pages 1192-1212, December.
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  9. Acemoglu, Daron & Cao, Dan, 2015. "Innovation by entrants and incumbents," Journal of Economic Theory, Elsevier, vol. 157(C), pages 255-294.
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  13. James Bessen & Eric Maskin, 2009. "Sequential innovation, patents, and imitation," RAND Journal of Economics, RAND Corporation, vol. 40(4), pages 611-635.
  14. Ledezma, Ivan, 2013. "Defensive strategies in quality ladders," Journal of Economic Dynamics and Control, Elsevier, vol. 37(1), pages 176-194.
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  27. Athey, Susan & Schmutzler, Armin, 2001. "Investment and Market Dominance," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 1-26, Spring.
  28. Vincenzo Denicolò & Piercarlo Zanchettin, 2012. "Leadership Cycles in a Quality‐Ladder Model of Endogenous Growth," Economic Journal, Royal Economic Society, vol. 122(561), pages 618-650, 06.
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