Economic growth with imperfect protection of intellectual property rights

Ryo Horii, Tatsuro Iwaisako

Research output: Contribution to journalArticlepeer-review

66 Citations (Scopus)

Abstract

This paper examines the growth effects of intellectual property right (IPR) protection in a quality-ladder model of endogenous growth. Stronger IPR protection, which reduces the imitation probability, increases the reward for innovation. However, stronger protection also gradually reduces the number of competitive sectors, in which innovation is easier than in monopolistic sectors. With free entry to R&D, the number of researchers in each remaining competitive sector increases, but the concentration of R&D activity raises the possibility of unnecessary duplication of innovation, thereby hindering growth. Consequently, imperfect rather than perfect protection maximizes growth. Welfare and scale effects are also examined.

Original languageEnglish
Pages (from-to)45-85
Number of pages41
JournalJournal of Economics/ Zeitschrift fur Nationalokonomie
Volume90
Issue number1
DOIs
Publication statusPublished - 2007 Jan

Keywords

  • Duplication
  • Endogenous growth
  • Intellectual property rights
  • Leapfrogging
  • Quality ladder

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics

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