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

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  • Christian Kiedaisch

Abstract

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.

Suggested Citation

  • Christian Kiedaisch, 2012. "Intellectual property rights in a quality-ladder model with persistent leadership," ECON - Working Papers 078, Department of Economics - University of Zurich.
  • Handle: RePEc:zur:econwp:078
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Chu, Angus C. & Cozzi, Guido & Pan, Shiyuan & Zhang, Mengbo, 2016. "Do Stronger Patents Stimulate or Stifle Innovation? The Crucial Role of Financial Development," MPRA Paper 73630, University Library of Munich, Germany.
    2. Tatsuro Iwaisako & Kazuyoshi Ohki, 2015. "Innovation by Heterogeneous Leaders," Discussion Papers in Economics and Business 15-30-Rev., Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP), revised Apr 2018.
    3. Kiedaisch, Christian & Grafenhofer, Dominik, 2013. "Taste for Exclusivity and Intellectual Property Rights," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80017, Verein für Socialpolitik / German Economic Association.
    4. repec:eee:respol:v:47:y:2018:i:8:p:1538-1552 is not listed on IDEAS
    5. repec:red:issued:17-109 is not listed on IDEAS
    6. Tubadji, Annie & Nijkamp, Peter & Santarelli, Enrico, 2017. "Shacklean Uncertainty and Cultural Embeddedness as Innovation Constraints in the UK," GLO Discussion Paper Series 111, Global Labor Organization (GLO).
    7. Angus Chu & Guido Cozzi, 2018. "Effects of Patents versus R&D subsidies on Income Inequality"," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 29, pages 68-84, July.

    More about this item

    Keywords

    Intellectual property rights; persistent leadership; cumulative innovation; preemption; forward protection; non-obviousness requirement; patent policy;

    JEL classification:

    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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