Blocking Patents, Rent Protection and Economic Growth"
Michael Klein and
Yibai Yang
Review of Economic Dynamics, 2024, vol. 52, 1-20
Abstract:
We develop a Schumpeterian growth model to analyze the interaction between patent policy and firms' internal strategies to capture value from innovations. We consider two dimensions of patent policy: backward protection against imitation and forward protection, also known as blocking patents, against subsequent innovation that builds on a patented technology. Incumbent patent holders endogenously invest resources to protect their monopoly rents by impeding market entry of innovative competitors. We show that patent policy impacts economic growth through its influence on both the ex ante R&D incentives of potential innovators and the post-innovation rent protection incentives of incumbent firms. Most importantly, our analysis formalizes a novel growth-promoting role of forward protection; by guaranteeing previous innovators a share of future innovators' profits, forward protection reduces the incentive to actively obstruct follow-on innovations. We identify conditions under which the selective use of forward protection can stimulate economic growth through this mechanism. (Copyright: Elsevier)
Keywords: Patent policy; Blocking patents; Economic growth; Innovation; Intellectual property rights (search for similar items in EconPapers)
JEL-codes: O31 O34 O43 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
https://dx.doi.org/10.1016/j.red.2023.11.003
Access to full texts is restricted to ScienceDirect subscribers and institutional members. See https://www.sciencedirect.com/ for details.
Related works:
Software Item: Code and data files for "Blocking Patents, Rent Protection and Economic Growth" (2023) ![Downloads](/downloads_econpapers.gif)
Working Paper: Online Appendix to "Blocking Patents, Rent Protection and Economic Growth" (2023) ![Downloads](/downloads_econpapers.gif)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:red:issued:23-26
Ordering information: This journal article can be ordered from
https://www.economic ... ription-information/
red@elsevier.com
DOI: 10.1016/j.red.2023.11.003
Access Statistics for this article
Review of Economic Dynamics is currently edited by Loukas Karabarbounis
More articles in Review of Economic Dynamics from Elsevier for the Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann (chuichuiche@gmail.com).