Patent buyout in a model of endogenous growth

Ravi Radhakrishnan

No 2016-51, Economics Discussion Papers from Kiel Institute for the World Economy

Abstract: This paper considers the prospect of a government patent buyout in a model of endogenous growth. To this end, the author modifies a standard quality ladder growth model by incorporating possibility of imitation, and rent protection activities (RPAs) by the innovator. The government finances the buyout by imposing a per unit sales-tax on the goods. The author shows that in this set-up, patent buyout by the government can lead to higher level of welfare without lowering an economy's growth rate along the balanced path. He highlights two sources of welfare improvement: elimination of monopoly pricing, and reduction in RPAs.

Keywords: innovation; imitation; patent; growth (search for similar items in EconPapers)
JEL-codes: O31 O34 O38 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-com, nep-ino and nep-ipr
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https://www.econstor.eu/bitstream/10419/148423/1/875118364.pdf (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:201651

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