To 'B' or Not To 'B': A Welfare Analysis of Breaking Up Monopolies in an Endogenous Growth Model

Xie, Danyang

doi:10.2139/ssrn.219468

Abstract

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To 'B' or Not To 'B': A Welfare Analysis of Breaking Up Monopolies in an Endogenous Growth Model

Danyang Xie

Hong Kong University of Science & Technology (HKUST) - Department of Economics

March 21, 2000

HKUST 2000

Abstract:
We study the welfare consequences of a government regulation that forces a patented equipment to be supplied by n independent producers. On the one hand, such a regulation hurts the value of a patent and therefore reduces activities in the R&D sector. On the other hand, the enhanced competition for the equipment improves efficiency in the manufacturing sector. Should we break up monopolies protected by intellectual property rights? The answer is no in a Romer-type growth model but we have sufficient reason to believe that the answer could be yes in a model advocated by Jones (1995).

Number of Pages in PDF File: 22

Keywords: R&D, Growth, Competition Policy

JEL Classification: O31, O38, O41

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Date posted: May 22, 2000

Suggested Citation

Xie, Danyang, To 'B' or Not To 'B': A Welfare Analysis of Breaking Up Monopolies in an Endogenous Growth Model (March 21, 2000). HKUST 2000. Available at SSRN: http://ssrn.com/abstract=219468 or http://dx.doi.org/10.2139/ssrn.219468

Contact Information

Danyang Xie (Contact Author)

Hong Kong University of Science & Technology (HKUST) - Department of Economics ( email )

Clear Water Bay
Kowloon, Hong Kong
China
852-2358-7615 (Phone)
852-2358-2084 (Fax)