Patents, knowledge spillovers, and entrepreneurship

Zoltan J. Acs, Mark Sanders

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

We develop an endogenous-growth model in which we distinguish between inventors and innovators. This distinction implies that stronger protection of intellectual property rights has an inverted U-shaped effect on economic growth. Intellectual property rights protection attributes part of the rents of commercial exploitation to the inventor that would otherwise accrue to the entrepreneur. Stronger patent protection will therefore increase the incentive to do research and development (R&D) and generate new knowledge. This new knowledge has a positive effect on entrepreneurship, innovation, and growth. However, after some point, further strengthening of patent protection will reduce the returns to entrepreneurship sufficiently to reduce the overall growth rate.
Original languageEnglish
Pages (from-to)801-817
Number of pages17
JournalSmall Business Economics
Volume39
Issue number4
DOIs
Publication statusPublished - 1 Nov 2012
Externally publishedYes

Keywords

  • Patents
  • Externalities
  • Entrepreneurship
  • Intellectual property
  • Economic models
  • Research & development
  • Economic development
  • Endogenous growth
  • Innovation
  • Intellectual property rights
  • Invention processes
  • Inventions
  • Knowledge spillovers
  • M13
  • O31
  • O34
  • O41
  • R&D

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