Intellectual Property Rights and the Knowledge Spillover Theory
- Slides: 17
Intellectual Property Rights and the Knowledge Spillover Theory of Entrepreneurship Max Planck Institute 9 September 2008 Jena Mark Sanders Utrecht School of Economics Max Planck Institute of Economics m. sanders@econ. uu. nl
Motivation Schumpeter and Endogenous Growth Theory Innovation vs. Invention Who gets rents? Opportunities vs. Ideas The source of vs. the bottleneck in innovation Growth and Ideas; the basic model structure Consumers Producers/Intermediates Invention, Innovation and Growth Patents and the US Patent Reform: Patents and the Bargain over Rents Incentives for Knowledge Creation Incentives for Knowledge Commercialization Outcomes
Growth and Ideas Basic Structure: Consumers 1. Willing to save 2. Demand for innovations Basic Structure: Producers 1. Make profit (imperfect competition) 2. Demand production factors
Growth and Ideas Basic Structure: Inventors/Innovators 1. Make zero-profit (free entry) 2. Need to demand R&D factors Auction off ideas at willingness to pay: Produce ideas according to:
Growth and Ideas Basic Structure: 1. Growth is positive for positive R&D 2. Sub-optimal in case of spillovers Intra-temporal knowledge spillovers Inter-temporal knowledge spillovers Positive steady state growth requires: latent demand for innovation imperfect competition appropriation of rents by new knowledge creators increasing returns to scale in aggregate production Optimal growth requires: stimulation of knowledge creation patents to internalize part of the spillovers
Patents Historical: Royal Favor and Revenue Inventions and Innovations Knowledge and Ideas Recent US reforms The Rationale: Knowledge creation is source of growth Patents reward knowledge creation Patent protection stimulates growth Incentives and Rewards: But what drives knowledge creation? And what drives invention? And what drives innovation?
A Model (Acs and Sanders 2008) Consumers of final good C Producers of final good C Labor Market Capital Market Producers of n intermediate goods
A Model (Acs and Sanders 2008) Consumers (standard)
A Model (Acs and Sanders 2008) Final Goods Producers
A Model (Acs and Sanders 2008) Final Goods Producers (R&D)
A Model (Acs and Sanders 2007) Intermediate Goods Producers
A Model (Acs and Sanders 2007) Intermediate Goods Producers (Entry) Entry-Arbitrage:
A Model (Acs and Sanders 2008) Equilibrium in labor market:
A Model (Acs and Sanders 2008) Equilibrium 1 A/n* A/n
A Model (Acs and Sanders 2008) Equilibrium Steady State:
A Model (Acs and Sanders 2008) New Features: Captures spin-out/off Captures upstream spillovers (specialization) Captures downstream spillovers (opportunities) Residual rents reward commercialization Patents transfer rents from innovators to inventors Results in line with new growth theory: Growth Sub-Optimal Both R&D and Entrepreneurs should be supported R&D more than Entrepreneurs More patent protection means more R&D… Results in contrast to new growth theory: …but also less commercialization. Too much protection may lead to lower innovation Distinguishing entrepreneurs from R&D makes a difference
A Model (Acs and Sanders 2008) In the tradition of Schumpeter we: …separate commercialization and invention, …allocate the residual monopoly rents to the entrepreneur, …assume opportunity to be a spillover. In the tradition of Romer we: …see patents as (imperfect) claims to rents, …that incentivize knowledge creation. But we show that: …patents are not needed to incentivize R&D and… …strengthening patent protection may overshoot the target, …as Jaffe and Lerner (2004) argue it has in the US.
- Trade related aspects of intellectual property rights
- Intellectual property in professional practices
- Intellectual property rights
- Intellectual property rights
- Harold demsetz toward a theory of property rights
- Importance of intellectual property
- Intellectual property management definition
- Advantages of intellectual property
- Intellectual property in business plan
- Property
- Right to intellectual property of teachers
- Intellectual property law definition
- Incentive theory
- Concept of intellectual property
- Valuation of ip
- Characteristics of intellectual property
- Discuss intellectual property frankly
- Sfas 142