Quaderni del Dipartimento di Scienze Economiche e Matematico-Statistiche dell'Università del Salento - Collana di Economia

The patents power is threefold: first, they are important to state the property right’s appropriability of an invention; second, they are necessary in order to secure financing for starting a new venture; third, they are fundamental in order to recoup the positive R&D cost investment. The main difficulty, in preventing innovation’s unauthorized uses, is in the establishment of ranges and contexts about patents applicability. Noting the legal system’s imperfections, we are in a position to consider an economy with two levels of competition under different market structures: the inter-sector monopolistic competition and the intra-sector Cournot oligopoly. The explicit consideration of strategic interaction in a model of endogenous growth produces interesting results. Considering the sectorial market share as the indicator of patent system enforcement, I find that growth takes place, if and only if, there are some property rights of private knowledge developed by R&D activities. In turn, the perfectionism in the patent system means a low degree of competition among terms. Its influence on the growth rate goes in a single unambiguous direction. When the market is highly competitive few resources are available for R&D, so the growth rate goes down.