Patentability and Knowledge Spillovers of Basic R&D. (1st April 2013)

• Record Type: Journal Article
• Authors: Chu, Angus C.; Furukawa, Yuichi
• Is Part Of: Southern economic journal. Volume 79:Number 4(2013)
• Page Start: 928
• Page End: 945
• Publication Date: 2013-04-01
• Subjects: O31 -- O34 -- O40; Southern States -- Economic conditions -- Periodicals; Economics -- Periodicals; Economic history; Economics; Southern States; Periodicals; 330.975005
• DOI: 10.4284/0038-4038-2011.207
• Languages: English
• ISSNs: 0038-4038

Abstract

Abstract : This study develops a research and development (R&D)–based growth model with basic and applied research to analyze the growth and welfare effects of two patent instruments: (i) the patentability of basic R&D and (ii) the division of profit between basic and applied researchers. We find that for the purpose of stimulating basic R&D and economic growth simultaneously, increasing the share of profit assigned to basic researchers is more effective than raising the patentability of basic R&D, which has either a negative effect or an inverted‐U effect on technological progress. However, a benevolent patent authority requires both patent instruments to achieve the socially optimal allocation in the decentralized economy.