Growth and Welfare Effects of Interventions in Patent Licensing Negotiations

Shin Kishimoto and Keishun Suzuki

MPRA Paper from University Library of Munich, Germany

Abstract: Policy makers sometimes intervene in patent licensing negotiations to guide licensing fees, but the impacts of such interventions on economic growth and welfare are relatively unknown. This paper develops a novel Schumpeterian growth model featuring a cooperative game-theoretic framework that describes negotiations about licensing fees. We find that the growth effect of intervention is negative if firms can raise unlimited external funds for their R&D investment. However, when the amount of external funds available is limited, both the growth and the welfare effects of intervention can be positive. This result means that interventions are desirable when the internal funds of firms are the main source of their R&D investment.

Keywords: Patent licensing negotiations; Schumpeterian growth; Cooperative game; Patent protection; Financial constraints. (search for similar items in EconPapers)
JEL-codes: C71 D45 O30 (search for similar items in EconPapers)
Date: 2021-05-28
New Economics Papers: this item is included in nep-fdg, nep-gth, nep-ino, nep-ipr, nep-sbm and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:108009

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