Patents, R&D subsidies, and endogenous market structure in a schumpeterian economy

Angus Chu, Yuichi Furukawa and Lei Ji

Southern Economic Journal, 2016, vol. 82, issue 3, 809-825

Abstract: This study explores the different implications of patent breadth and R&D subsidies on economic growth and endogenous market structure in a Schumpeterian growth model. We find that when the number of firms is fixed in the short run, patent breadth and R&D subsidies serve to increase economic growth as in previous studies. However, when market structure adjusts endogenously in the long run, R&D subsidies increase economic growth but decrease the number of firms, whereas patent breadth expands the number of firms but reduces economic growth. Therefore, in accordance with empirical evidence, R&D subsidy is perhaps a more suitable policy instrument than patent breadth for the purpose of stimulating long‐run economic growth.

Date: 2016
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https://doi.org/10.1002/soej.12122

Related works:
Working Paper: Patents RD subsidies and endogenous market structure in a Schumpeterian economy (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:soecon:v:82:y:2016:i:3:p:809-825

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