nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2022‒01‒17
two papers chosen by
Giovanni Ramello
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. Effects of patent policy on growth and inequality: A perspective of exogenous and endogenous quality improvements By Lu, You-Xun; Lai, Ching-Chong
  2. Innovation under central planning: patenting and productivity in the GDR By Frieling, Titus

  1. By: Lu, You-Xun; Lai, Ching-Chong
    Abstract: In this study, we explore the effects of patent protection on growth and inequality under exogenous versus endogenous quality improvements. With an exogenous step size of quality improvement, strengthening patent protection promotes economic growth; the strengthening in patent protection has an ambiguous effect on income inequality but a negative effect on consumption inequality. However, with an endogenous step size, the growth effect of patent protection becomes ambiguous; the strengthening in patent protection still has an ambiguous effect on income inequality but a negative effect on consumption inequality. Under our calibrated parameter values, we find that strengthening patent protection raises the degree of income inequality under exogenous quality improvements. In the case of endogenous quality improvements, our results show that the strengthening in patent protection has an inverted-U effect on economic growth; both income inequality and consumption inequality decrease with the strength of patent protection.
    Keywords: innovation, patent protection, economic growth, inequality
    JEL: D30 O30 O40
    Date: 2021–12–21
  2. By: Frieling, Titus
    Abstract: This thesis employs novel datasets on patenting activity and TFP in the GDR to study the relationship between innovation and productivity. Patenting activity is chosen as a variable of interest due to its inherent link to the innovative process and high international and intertemporal comparability. No statistically significant relationship between patenting and future productivity growth is found in an analysis across 16 sectors of the GDR’s economy from 1950-1989. This result is unusual, and likely results out of the institutional framework of the GDR: firstly, it being a planned economy and the associated reduced productivity effects of innovations, and secondly, the GDR’s unique patent system which likely increased the number of patent applications while reducing their economic usefulness. By including the full breadth of the GDR’s patent stock, as well as robustly estimating the initial capital stock of the GDR, a more reliable account of both these variables can be made than was possible in previous studies. This thesis contributes to the literature through its use of new data and an adaptation of a proven empirical identification strategy to a new context. It also suggests avenues for further research on the relationship between patenting and innovation in the GDR and planned economies more widely.
    JEL: R14 J01 N0
    Date: 2021–12

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