Incentives for product and process innovations: a case for the drug industry

Aditya Bhan and Tarun Kabiraj

MPRA Paper from University Library of Munich, Germany

Abstract: We consider an interaction of competing firms in an integrated world market and study their R&D incentives under each of product patent and process patent regimes. We follow a framework generally observed in the drug industry. We show that product patent regime leads to a larger R&D investment. Consumers may also benefit from product patenting. However, if the number of goods is large enough, the choice of patent regime loses significance with respect to R&D incentives.

Keywords: Innovation; process patenting; product patenting; drug industry (search for similar items in EconPapers)
JEL-codes: F23 L13 O34 (search for similar items in EconPapers)
Date: 2014-12-15
New Economics Papers: this item is included in nep-com, nep-ino, nep-ipr, nep-pr~ and nep-mkt
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:61030

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