Imitation Induced Innovation in General Equilibrium

Karsten Wasiluk ()

No 2014-12, Working Paper Series of the Department of Economics, University of Konstanz from Department of Economics, University of Konstanz

Abstract: This paper analyzes the effect of imitation on the rate of technological progress in an endogenous growth model. Quality leaders protect themselves from imitation by secondary development, which increases technological progress. Nevertheless, lower intellectual property rights protection reduces the incentives to enter the research sector which reduces innovation by outsiders. Simulations show that the net effect of increased imitation on the growth rate is ambiguous - it can be positive, negative, or inversely U-shaped, depending on the productivity of secondary research. Lower patent protection also reduces the degree of market power in the economy so that output, the wage rate, and welfare is typically increased.

Keywords: Innovation; Intellectual Property Rights; Market Power (search for similar items in EconPapers)
JEL-codes: L12 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2014-10-22
New Economics Papers: this item is included in nep-com, nep-dge, nep-gro, nep-ino, nep-ipr and nep-pr~
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