Intellectual Property Law and Public Sponsorship of R & D in a Schumpeterian Growth Model with Fundamental and Applied R & D

Elie Gray

Revue d'économie politique, 2018, vol. 128, issue 5, 807-848

Abstract: We investigate, within a Schumpeterian growth model, how intellectual property (IP) law and public sponsorship of research and development (R & D) activities may provide appropriate incentives simultaneously to fundamental (or basic) research and to applied R&D. In order to consider and to distinguish between these two types of research, we merge the seminal models of Romer [1990] and Aghion and Howitt [1992] : knowledge accumulation stems from a series of inventions (horizontal / fundamental knowledge accumulation) and from a succession of innovations (vertical / applied knowledge accumulation) building upon each of these inventions. Then, we study a decentralized economy in which the creative destruction mechanism does not deter investments in fundamental research through an IP law design that induces profit-division between an inventor and his following innovators. We show that providing optimal incentives to fundamental research requires, not only a design of IP law that ensures a sufficient positive transfer from innovators to inventors, but also public policies in form of subsidies supporting both fundamental research and applied R & D activities.

Keywords: Schumpeterian Growth Theory; Inventions; Cumulative Innovations; Fundamentaland Applied R & D; R & D Incentives; Intellectual Property Law; Public Sponsorship ofR & D (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.cairn.info/load_pdf.php?ID_ARTICLE=REDP_285_0807 (application/pdf)
http://www.cairn.info/revue-d-economie-politique-2018-5-page-807.htm (text/html)
free

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cai:repdal:redp_285_0807

Access Statistics for this article

More articles in Revue d'économie politique from Dalloz
Bibliographic data for series maintained by Jean-Baptiste de Vathaire ().