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Growth and welfare effects of intellectual property rights when consumers differ in income

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  • Christian Kiedaisch

Abstract

This paper analyzes how changing the expected length of intellectual property (IP) protection affects economic growth and the welfare of rich and poor consumers. The analysis is based on a product-variety model with non-homothetic preferences and endogenous markups in which, in accordance with empirical evidence, rich households consume a larger variety of goods than poorer ones. The effects of IP protection on growth can be either positive or negative, depending on the distribution of income and wealth. Given that increasing the length of IP protection increases growth, poorer households prefer a shorter length of protection than richer ones.

Suggested Citation

  • Christian Kiedaisch, 2016. "Growth and welfare effects of intellectual property rights when consumers differ in income," ECON - Working Papers 221, Department of Economics - University of Zurich, revised Jul 2017.
  • Handle: RePEc:zur:econwp:221
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    File URL: http://www.econ.uzh.ch/static/wp/econwp221.pdf
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    References listed on IDEAS

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    1. Spinesi Luca, 2011. "Probabilistic Heterogeneous Patent Protection and Innovation Incentives," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-44, August.
    2. Ozan Hatipoglu, 2012. "The relationship between inequality and innovative activity: a S chumpeterian theory and evidence from cross‐country data," Scottish Journal of Political Economy, Scottish Economic Society, vol. 59(2), pages 224-248, May.
    3. Gilles Saint-Paul, 2006. "Distribution and Growth in an Economy with Limited Needs: Variable Markups and 'the End of Work'," Economic Journal, Royal Economic Society, vol. 116(511), pages 382-407, April.
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    Cited by:

    1. Chu, Angus C. & Cozzi, Guido & Fan, Haichao & Furukawa, Yuichi & Liao, Chih-Hsing, 2018. "Innovation and Inequality in a Monetary Schumpeterian Model with Heterogeneous Households and Firms," MPRA Paper 84711, University Library of Munich, Germany.
    2. repec:red:issued:17-109 is not listed on IDEAS
    3. 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; income distribution; endogenous growth; non-homothetic preferences;

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • D30 - Microeconomics - - Distribution - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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