Patentability and Knowledge Spillovers of Basic R&D

Angus Chu and Yuichi Furukawa

Southern Economic Journal, 2013, vol. 79, issue 4, 928-945

Abstract: This study develops a research and development (R&D)–based growth model with basic and applied research to analyze the growth and welfare effects of two patent instruments: (i) the patentability of basic R&D and (ii) the division of profit between basic and applied researchers. We find that for the purpose of stimulating basic R&D and economic growth simultaneously, increasing the share of profit assigned to basic researchers is more effective than raising the patentability of basic R&D, which has either a negative effect or an inverted‐U effect on technological progress. However, a benevolent patent authority requires both patent instruments to achieve the socially optimal allocation in the decentralized economy.

Date: 2013
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https://doi.org/10.4284/0038-4038-2011.207

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Persistent link: https://EconPapers.repec.org/RePEc:wly:soecon:v:79:y:2013:i:4:p:928-945

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