Innovations , Patent Races and Endogenous Growth

  title={Innovations , Patent Races and Endogenous Growth},
  author={Joseph Zeira},
This paper presents a model of innovations and economic growth, in which patent rates emerge endogenously, as a result of two assumptions: first, R&D is innovation-specific, second, marginal cost of innovation is increasing. The paper then examines the effects of patent races on growth, welfare, and the market structure of R&D, and derives three main results. The first is that patent races reduce significantly the effect of scale on growth. The second result is that R&D is Pareto-inefficient… CONTINUE READING