Intellectual Appropriability, Product Differentiation, And Growth
Journal
Macroeconomic Dynamics
ISSN
1365-1005
Type
journal article
Date Issued
2006-02-01
Author(s)
Abstract
In the modern world, the main assets are immaterial ideas. Such assets are much more easily stolen than traditional factors such as physical capital and land. In this paper, we investigate the long-run growth effects of intellectual misappropriation at the R&D level. We adopt a generalized framework with both vertical and horizontal innovation. Inspired by recent evidence and by the patent law, we assume that only vertical innovations can be spied, because they are less easily patented than horizontal innovations. The main results are: (1) despite growing population, the fraction of labor engaged in spying activities tends to be constant; (2) in economies in which the R&D process is more vulnerable to ideas theft, growth rates are lower but product differentiation will be more intense; (3) intellectual misappropriation neutralizes the positive growth effect of R&D subsidies but not their positive level effects.
Language
English
Keywords
Schumpeterian Growth
vertical Innovation
horizontal Innovation
industrial Espionage
R&D.
HSG Classification
contribution to scientific community
HSG Profile Area
SEPS - Economic Policy
Refereed
Yes
Publisher
Cambridge Univ. Press
Publisher place
Cambridge
Volume
10
Number
1
Start page
39
End page
55
Pages
17
Subject(s)
Eprints ID
222071