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

18 Pages Posted: 6 Feb 2006

See all articles by Danyang Xie

Danyang Xie

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

Multiple version iconThere are 2 versions of this paper

Date Written: November 2000

Abstract

This paper studies the welfare consequences of a government regulation that forces a patented equipment to be supplied by a number of 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 monopolies protected by intellectual property rights be broken up? The answer is "no" in a Romer-type growth model, but there is sufficient reason to believe that the answer could be "yes" in a model advocated by Jones (1995).

Keywords: R&D, Growth, Competition Policy

JEL Classification: O31, O38, O41

Suggested Citation

Xie, Danyang, To 'B' or Not to 'B': A Welfare Analysis of Breaking Up Monopolies in an Endogenous Growth Model (November 2000). IMF Working Paper, Vol. , pp. 1-18, 2000. Available at SSRN: https://ssrn.com/abstract=880289

Danyang Xie (Contact Author)

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

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