Economic Growth with Imperfect Protection of Intellectual Property Rights

Osaka University, International Public Policy (OSIPP) Discussion Paper

37 Pages Posted: 15 Aug 2005

See all articles by Ryo Horii

Ryo Horii

Osaka University - Institute of Social and Economic Research

Tatsuro Iwaisako

Osaka University - Graduate School of Economics

Date Written: August 2005

Abstract

The growth effects of intellectual property right (IPR) protection are examined in a quality-ladder model of endogenous growth. Stronger IPR protection, which reduces the probability of imitation, raises the reward for innovation. However, stronger protection reduces the number of competitive sectors, in which it is easier to innovate than in monopolistic sectors, thus concentrating researchers into fewer competitive sectors. As R&D projects take time until they are completed, concentration of R&D activity in a field raises the possibility of duplication of innovation, thereby hindering growth. In several settings, we show that imperfect, rather than perfect, protection maximizes growth.

Keywords: Intellectual property rights, endogenous growth, quality ladder, imitation, leapfrogging, duplication

JEL Classification: O31, O34, O41

Suggested Citation

Horii, Ryo and Iwaisako, Tatsuro, Economic Growth with Imperfect Protection of Intellectual Property Rights (August 2005). Osaka University International Public Policy (OSIPP) Discussion Paper. Available at SSRN: https://ssrn.com/abstract=776264 or http://dx.doi.org/10.2139/ssrn.776264

Ryo Horii (Contact Author)

Osaka University - Institute of Social and Economic Research ( email )

1-1 Yamadaoka
Suita, Osaka 565-0871
Japan
+81 6 6879 8552 (Phone)
+81 6 6879 8583 (Fax)

HOME PAGE: http://econ.jpn.org/horii/

Tatsuro Iwaisako

Osaka University - Graduate School of Economics ( email )

1-7 Machikaneyama
Toyonaka, Osaka, 560-0043
Japan

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