Campaign contributions and innovation in a fully-endogenous quality-ladder model

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Abstract

This paper examines the effect of campaign contributions on patent policy, welfare, and innovation using a fully-endogenous quality-ladder model. Assuming two types of households, where one type holds patents and the other does not, we analyze political conflicts between the two groups. Our analysis shows campaign contributions increase the rate of innovation to an excessive level from the viewpoint of social welfare when the innovation-maximizing patent policy is sufficiently strong. This result is important because it implies that the rate of innovation distorted by campaign contributions can be too high from the viewpoint of social welfare.

Original languageEnglish
Pages (from-to)139-157
Number of pages19
JournalAsia-Pacific Journal of Regional Science
Volume2
Issue number1
DOIs
Publication statusPublished - Apr 2018

All Science Journal Classification (ASJC) codes

  • Development
  • Urban Studies
  • Economics, Econometrics and Finance (miscellaneous)
  • Renewable Energy, Sustainability and the Environment

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