nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2012‒06‒13
two papers chosen by
Rui Baptista
Technical University of Lisbon

  1. Intellectual property rights in a quality-ladder model with persistent leadership By Christian Kiedaisch
  2. Empirical Confirmation of Creative Destruction from World Trade Data By Klimek, Peter; Hausmann, Ricardo; Thurner, Stefan

  1. By: Christian Kiedaisch
    Abstract: This article analyzes the effects of intellectual property rights in a quality-ladder model in which incumbent firms preemptively innovate in order to keep their position of leadership. Unlike in models with leapfrogging, granting non-expiring forward protection reduces the rate of innovation and imposing a non-obviousness requirement reduces R&D spending. It is shown that full protection against imitation, granted independently of the size of the lead, maximizes the average innovation rate.
    Keywords: Intellectual property rights, persistent leadership, cumulative innovation, preemption, forward protection, non-obviousness requirement, patent policy
    JEL: L40 O31 O34
    Date: 2012–05
  2. By: Klimek, Peter (Medical University of Vienna); Hausmann, Ricardo (Harvard University and Santa Fe Institute); Thurner, Stefan (Medical University of Vienna and Santa Fe Institute)
    Abstract: We show that world trade network datasets contain empirical evidence that the dynamics of innovation in the world economy follows indeed the concept of creative destruction, as proposed by J.A. Schumpeter more than half a century ago. National economies can be viewed as complex, evolving systems, driven by a stream of appearance and disappearance of goods and services. Products appear in bursts of creative cascades. We find that products systematically tend to co-appear, and that product appearances lead to massive disappearance events of existing products in the following years. The opposite--disappearances followed by periods of appearances--is not observed. This is an empirical validation of the dominance of cascading competitive replacement events on the scale of national economies, i.e. creative destruction. We find a tendency that more complex products drive out less complex ones, i.e. progress has a direction. Finally we show that the growth trajectory of a country's product output diversity can be understood by a recently proposed evolutionary model of Schumpeterian economic dynamics.
    Date: 2012–05

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