Sequential R&D and Blocking Patents in the Dynamics of Growth

Guido Cozzi and Silvia Galli ()

No 1305, Economics Working Paper Series from University of St. Gallen, School of Economics and Political Science

Abstract: The incentives to conduct basic or applied research play a central role for economic growth. How does increasing early innovation appropriability affect basic research, applied research, innovation and growth? In a common law system an explicitly dynamic macroeconomic analysis is appropriate. This paper analyzes the macroeconomic effects of patent protection by incorporating a twostage cumulative innovation structure into a quality-ladder growth model with skill acquisition. We focus on two issues: (a) the over-protection vs. the under-protection of intellectual property rights in basic research; (b) the evolution of jurisprudence shaping the bargaining power of the upstream innovators. We show that the dynamic general equilibrium interactions may seriously mislead the empirical assessment of the growth effects of IPR policy: stronger protection of upstream innovation always looks bad in the short- and possibly medium-run. We also provide a simple "rule of thumb" indicator of the basic researcher bargaining power.

Keywords: Endogenous Growth; Basic and Applied Research; Endogenous Technological Change; Common Law. (search for similar items in EconPapers)
JEL-codes: O31 O33 O34 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2013-03
New Economics Papers: this item is included in nep-cse, nep-ino, nep-ipr, nep-pr~ and nep-knm
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: Sequential R&D and blocking patents in the dynamics of growth (2014)
Working Paper: Sequential R&D and Blocking Patents in the Dynamics of Growth (2012)
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