Journal of Economics

, Volume 90, Issue 1, pp 45–85 | Cite as

Economic Growth with Imperfect Protection of Intellectual Property Rights

Article

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.

Keywords

intellectual property rights endogenous growth quality ladder imitation leapfrogging duplication 

JEL Classification

O31 O34 O41 

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Copyright information

© Springer-Verlag Wien 2006

Authors and Affiliations

  1. 1.Graduate School of EconomicsOsaka UniversityOsakaJapan
  2. 2.Faculty of EconomicsRitsumeikan UniversityShigaJapan

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