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When does elastic labor supply cause an inverted-U effect of patents on innovation?

Author

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  • Chu, Angus C.
  • Pan, Shiyuan
  • Sun, Minjuan
Abstract
This study analyzes how patent protection affects innovation in an R&D-based growth model with elastic labor supply. We find that increasing patent breadth may generate an inverted-U effect on innovation depending on whether the model features the knowledge-driven or lab-equipment innovation process. This result highlights an important interaction between elastic labor supply and the innovation process through which patent protection has an inverted-U effect as documented in recent empirical studies.

Suggested Citation

  • Chu, Angus C. & Pan, Shiyuan & Sun, Minjuan, 2012. "When does elastic labor supply cause an inverted-U effect of patents on innovation?," Economics Letters, Elsevier, vol. 117(1), pages 211-213.
    • Handle: RePEc:eee:ecolet:v:117:y:2012:i:1:p:211-213
    DOI: 10.1016/j.econlet.2012.04.082
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    References listed on IDEAS

    as
    1. Maggie Xiaoyang Chen & Murat Iyigun, 2011. "Patent Protection and Strategic Delays in Technology Development: Implications for Economic Growth," Southern Economic Journal, John Wiley & Sons, vol. 78(1), pages 211-232, July.
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    8. Richard Gilbert & Carl Shapiro, 1990. "Optimal Patent Length and Breadth," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 106-112, Spring.
    9. Angus C. Chu, 2010. "Effects of Patent Policy on Income and Consumption Inequality in a R&D Growth Model," Southern Economic Journal, John Wiley & Sons, vol. 77(2), pages 336-350, October.
    10. Francisco L. Rivera-Batiz & Luis A. Rivera-Batiz, 2018. "Economic Integration and Endogenous Growth," World Scientific Book Chapters, in: Francisco L Rivera-Batiz & Luis A Rivera-Batiz (ed.), International Trade, Capital Flows and Economic Development, chapter 1, pages 3-32, World Scientific Publishing Co. Pte. Ltd..
    11. Ai-Ting Goh & Jacques Olivier, 2002. "Optimal Patent Protection in a Two-Sector Economy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1191-1214, November.
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    Cited by:

    1. Chu, Angus C. & Furukawa, Yuichi, 2012. "Patents versus R&D subsidies in a Schumpeterian growth model with endogenous market structure," MPRA Paper 41083, University Library of Munich, Germany, revised Sep 2012.
    2. Angus C. Chu, 2024. "Macroeconomic effects of intellectual property rights: an updated survey," Chapters, in: Walter G. Park (ed.), Handbook of Innovation and Intellectual Property Rights, chapter 2, pages 13-26, Edward Elgar Publishing.
    3. He, Qichun & Zou, Heng-fu, 2016. "Does inflation cause growth in the reform-era China? Theory and evidence," International Review of Economics & Finance, Elsevier, vol. 45(C), pages 470-484.
    4. Carla Marchese & Fabio Privileggi, 2018. "Endogenous economic growth with disembodied knowledge," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 20(3), pages 437-449, June.
    5. Iwaisako, Tatsuro, 2013. "Welfare effects of patent protection and productive public services: Why do developing countries prefer weaker patent protection?," Economics Letters, Elsevier, vol. 118(3), pages 478-481.
    6. Rudra Narayan Kushwaha & Taniya Ghosh, 2023. "The Effects of population growth on patents and economic growth dynamics," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2023-05, Indira Gandhi Institute of Development Research, Mumbai, India.
    7. Keiichi Kishi, 2014. "A patentability requirement and industries targeted by R&D," Discussion Papers in Economics and Business 14-27-Rev., Osaka University, Graduate School of Economics, revised Oct 2014.
    8. Furukawa, Yuichi, 2013. "The struggle to survive in the R&D sector: Implications for innovation and growth," Economics Letters, Elsevier, vol. 121(1), pages 26-29.

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    More about this item

    Keywords

    Economic growth; Innovation; Intellectual property rights;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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