Patent Protection in a Model of Economic Growth in Multiple Regions

Networks and Spatial Economics, Vol. 17, pp. 255-268, 2017

Posted: 24 Mar 2017

See all articles by Amitrajeet A. Batabyal

Amitrajeet A. Batabyal

Rochester Institute of Technology

Hamid Beladi

University of Texas at San Antonio - College of Business - Department of Economics

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Date Written: March 23, 2017

Abstract

We study the effects of patent protection on economic growth in the ith region when this ith region is part of an aggregate economy of i=1,...,N regions. The regulatory authority in the ith region attempts to curtail the monopoly power of patent holding input producers by requiring them to charge a price that is parametrically related to the unconstrained monopoly price. Our analysis generates three results. First, we show the manner in which the equilibrium growth rate of the ith region is related to the above mentioned parameter. Second, we demonstrate the impact that changes in the stringency of patent protection have on the ith region’s equilibrium growth rate. Finally, we explain why eliminating the monopoly distortion does not maximize social welfare in the ith region.

Keywords: Dynamic, Human Capital, Innovation, Multi-Region Economy, Patent Protection

JEL Classification: R11, O31, L52

Suggested Citation

Batabyal, Amitrajeet A. and Beladi, Hamid, Patent Protection in a Model of Economic Growth in Multiple Regions (March 23, 2017). Networks and Spatial Economics, Vol. 17, pp. 255-268, 2017, Available at SSRN: https://ssrn.com/abstract=2939874

Amitrajeet A. Batabyal (Contact Author)

Rochester Institute of Technology ( email )

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Hamid Beladi

University of Texas at San Antonio - College of Business - Department of Economics ( email )

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