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Patents versus R&D subsidies in a Schumpeterian growth model with endogenous market structure

Angus Chu () and Yuichi Furukawa ()

MPRA Paper from University Library of Munich, Germany

Abstract: In this note, we explore the different implications of patent breadth and R&D subsidies on economic growth and endogenous market structure in a Schumpeterian growth model. We find that these two policy instruments have the same positive effect on economic growth when the model exhibits counterfactual scale effects under an exogenous number of firms. However, when the model becomes scale-invariant under an endogenous number of �firms, R&D subsidies increase economic growth but decrease the number of firms, whereas patent breadth expands the number of firms but reduces economic growth. Therefore, R&D subsidy is perhaps a more suitable policy instrument than patent breadth for the purpose of stimulating economic growth.

Keywords: economic growth; endogenous market structure; patents; R&D subsidies (search for similar items in EconPapers)
JEL-codes: O30 O40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-dge, nep-fdg, nep-ind, nep-ino, nep-ipr, nep-pr~ and nep-tid
Date: 2012-08, Revised 2012-09
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https://mpra.ub.uni-muenchen.de/41083/1/MPRA_paper_41083.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/48653/1/MPRA_paper_48653.pdf revised version (application/pdf)

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Working Paper: Patents versus R&D subsidies in a Schumpeterian growth model with endogenous market structure (2012) Downloads
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