Quantifying the Effects of Patent Protection on Innovation, Imitation, Growth, and Aggregate Productivity

Pedro Bento

No 20150801-001, Working Papers from Texas A&M University, Department of Economics

Abstract: I develop a general equilibrium model in which patent protection affects sequential innovation, original innovation, and imitation. Protection increases the cost of working around existing patents, but imposes costs disproportionately for innovators and imitators. Depending on these relative costs, protection can in theory increase or decrease markups, imitation, long-run growth, and aggregate productivity. Using data from several different sources, I calibrate the model and quantitatively assess the effects of patent protection in practice. I find that weakening protection in the U.S. would lead to no change in markups and imitation, no change in long-run growth, a more than doubling of the number of firms, and an increase in aggregate productivity of 11 percent.

Keywords: patent protection; firm size; productivity; innovation; imitation; competition (search for similar items in EconPapers)
JEL-codes: O1 O3 O4 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2015-08-01
New Economics Papers: this item is included in nep-eff, nep-gro, nep-ino, nep-ipr and nep-pr~
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Quantifying the Effects of Patent Protection on Innovation, Imitation, Growth, and Aggregate Productivity (2021)
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