| Abstract: |
I develop an endogenous growth model that separates firm decisions to invent,
patent, and commercialize new innovations. I use the model to examine how
multiple dimensions of patent policy impact economic growth by shaping these
relative incentives. I pay particular attention to the role of patenting
requirements that dictate how far along the development process an inventor
must progress to obtain a patent. The model formalizes how strengthening such
requirements generates competing effects on economic growth; stronger
requirements reduce ex ante research incentives by increasing the expected
cost of patenting, but increase ex post incentives to fully develop patented
inventions into commercial innovations by decreasing the additional cost
associated with commercialization. Overall, my analysis supports the use of
patenting requirements as an effective policy tool to improve economic
outcomes by shifting incentives away from invention in the pursuit of patents
and towards the development of commercial innovations. |