Growth and Welfare Effects of Patentability and Knowledge Spillovers of Basic R&D

Chu, Angus C. and Furukawa, Yuichi (2011): Growth and Welfare Effects of Patentability and Knowledge Spillovers of Basic R&D.

Abstract

This study develops an R&D-based growth model with basic and applied research to analyze the growth and welfare effects of two patent instruments (a) the patentability of basic R&D and (b) the division of profi�t between basic and applied researchers. We �find that for the purpose of stimulating basic R&D and economic growth simultaneously, increasing the share of profi�t assigned to basic researchers is more effective than raising the patentability of basic R&D, which has either a negative effect or an inverted-U effect on technological progress. Nonetheless, a benevolent patent authority requires both patent instruments to achieve the socially optimal allocation in the decentralized economy.

• Item Type: MPRA Paper
• Language: English
• Keywords: economic growth; innovation; intellectual property rights
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O34 - Intellectual Property and Intellectual Capital; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General

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