Intellectual property and product market competition regulations in a model with two R&D performing sectors
2021
Abstrakt
I analyze the impact of intellectual property and product market competition regulations on innovation and long-run growth in an endogenous growth model with two R&D performing sectors. I show that strengthening intellectual property rights and competition in a sector increases its R&D investments.
However, these policies adversely affect R&D investments in the other sector because of increased factor competition between the sectors. As a result, the overall impact of such policies on economic growth is ambiguous.
I perform a numerical exercise in an attempt to resolve this ambiguity. This exercise suggests that strengthening intellectual property rights increases economic growth, but higher competition has a very limited effect on growth.