Examination and Approval of New Patents in an Endogenous Growth Model |
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| Institution: | 1. Faculty of Economics, Fukuoka University, 8-19-1, Nanakuma, Jonan-ku, Fukuoka, 814-0180, Japan;2. Faculty of International Politics and Economics, Nishogakusha University, 6-16 Sanbancho, Chiyoda-ku, Tokyo, 102-8336, Japan;1. Department of Management, Università Politecnica delle Marche, Ancona, Italy;2. Department of Economics and Social Science, Università Politecnica delle Marche, Ancona, Italy;1. Department of Financial Engineering, Ajou University, Suwon, 16499, Republic of Korea;2. Department of Applied Mathematics & Institute of Natural Science, Kyung Hee University, Yongin, 17104, Republic of Korea;3. Department of Mathematical Sciences, Seoul National University, Seoul, 08826, Republic of Korea;1. Texas A&M University, Department of Finance, Mays Business School, College Station, TX, 77843, USA;2. University of Valladolid (Spain), NRU Higher School of Economics (Russia), School of Business and Economics, Avda. Valle Del Esgueva 6, 47011, Valladolid, Spain;3. University of Valladolid, School of Business and Economics, Avda. Valle Del Esgueva 6, 47011, Valladolid, Spain;1. Institute of Finance, School of Economics, Nankai University, Tianjin, PR China;2. The Collaborative Innovation Center for China Economy, Nankai University, Tianjin, PR China;3. School of Finance, Tianjin University of Finance and Economics, Tianjin, PR China |
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| Abstract: | This study introduces the examination duration for newly developed goods into a standard R&D-based growth model. Producing such goods requires approval from an authority, and their examination incurs both cost and time. Thus, there is a lag between invention and production. This study investigates the effects of reducing the examination duration on examination backlogs (the number of newly invented goods under examination), economic growth, and welfare. We obtain an inverted-U shaped relationship between backlogs and duration, because reducing the duration decreases backlogs by accelerating the examination process, but simultaneously increases backlogs by promoting R&D and increasing the number of applications. In addition, we demonstrate that reducing the examination duration promotes economic growth. However, a rather short examination duration needs considerable resources as the examination has a higher cost. Thus, an extremely short duration hurts welfare. Our numerical analysis reveals the existence of an optimal examination duration. |
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| Keywords: | Endogenous growth R&D Variety innovation Examination duration O31 O34 O38 |
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