Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/106143
Authors: 
Lai, Chung-hui
Wang, Vey
Year of Publication: 
2015
Series/Report no.: 
Economics Discussion Papers 2015-1
Abstract: 
The protection of intellectual property rights (IPR) and the distribution of rent are central issues in R&D-based growth models with the return to innovation serving as the engine of growth. In this paper the authors consider the strength of the intellectual property rights and franchise bargaining system to analyze how the rent/franchise fee and institutional quality affect the economic growth and social welfare. It is found that the intermediate good firm with full IPR protection charges a price equal to the marginal cost. In addition, if imitated technologies exhibit a labor spillover effect, decreasing the IPR protection will increase the rent/franchise fee. The authors also show that the growth-maximizing effects of IPR protection, the bargaining power of intermediate goods firms, and the imitation of technology are no longer equivalent to those effects on welfare-maximization since the welfare result depends on the relative degrees of the growth enhancing effect and crowding-out effect on production.
Subjects: 
IPR
R&D
bargaining
endogenous growth
social welfare
JEL: 
L11
O40
O30
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Working Paper

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