Effects of intellectual property rights protection and integration on economic growth and welfare

Chung-hui Lai and Vey Wang

No 2015-1, Economics Discussion Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: The protection of intellectual property rights (IPR) and the distribution of rent are central issues in R&D-based growth models with the return to innovation serving as the engine of growth. In this paper the authors consider the strength of the intellectual property rights and franchise bargaining system to analyze how the rent/franchise fee and institutional quality affect the economic growth and social welfare. It is found that the intermediate good firm with full IPR protection charges a price equal to the marginal cost. In addition, if imitated technologies exhibit a labor spillover effect, decreasing the IPR protection will increase the rent/franchise fee. The authors also show that the growth-maximizing effects of IPR protection, the bargaining power of intermediate goods firms, and the imitation of technology are no longer equivalent to those effects on welfare-maximization since the welfare result depends on the relative degrees of the growth enhancing effect and crowding-out effect on production.

Keywords: IPR; R&D; bargaining; endogenous growth; social welfare (search for similar items in EconPapers)
JEL-codes: L11 O30 O40 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-gro, nep-ino, nep-ipr, nep-pr~ and nep-knm
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http://www.economics-ejournal.org/economics/discussionpapers/2015-1
https://www.econstor.eu/bitstream/10419/106143/1/815347863.pdf (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:20151

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