Intellectual Property Rights and the Knowledge Spillover Theory of Entrepreneurship

Zoltan Acs and Mark Sanders

No 2008-069, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: We develop a model in which stronger protection of intellectual property rights has an inverted U-shaped effect on innovation. Intellectual property rights protection allows the incumbent firms to capture part of the rents of commercial exploration that would otherwise accrue to the entrepreneurs. Stronger patent protection will increase the incentive to do R+D and generate new knowledge. This has a positive impact on entrepreneurship and innovation. However, after some point, further strengthening patent protection will reduce the returns to entrepreneurship sufficiently to reduce overall economic growth.

Keywords: Intellectual Property Rights; Endogenous Growth; Entrepreneurship; Incentives; Knowledge Spillovers; Rents (search for similar items in EconPapers)
JEL-codes: J24 L26 M13 O3 (search for similar items in EconPapers)
Date: 2008-09-11
New Economics Papers: this item is included in nep-cse, nep-ent, nep-ino, nep-ipr, nep-pr~, nep-knm, nep-mic and nep-tid
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