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Economic Growth with Imperfect Protection of Intellectual Property Rights
The growth effects of intellectual property right (IPR) protection are examined in a quality-ladder model of endogenous growth. Stronger IPR protection, which reduces the probability of imitation, raises the reward for innovation. However, stronger protection reduces the number of competitive sectors, in which it is easier to innovate than in monopolistic sectors, thus concentrating researchers into fewer competitive sectors.
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Link
http://ideas.repec.org/cgi-bin/get_doc.pl?urn=RePEc:wpa:wuwpdc:0508001&url=http://econwpa.wustl.edu:8089/eps/dev/papers/0508/0508001.pdf