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

  • 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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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
Date of revision:
Handle: RePEc:zur:econwp:078
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