The interplay of innovation and standardization in economic growth

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Title: The interplay of innovation and standardization in economic growth
Author: Avdeeva, Iana
Contributor: University of Helsinki, Faculty of Social Sciences, Department of Political and Economic Studies
Publisher: Helsingin yliopisto
Date: 2014
Language: eng
Thesis level: master's thesis
Discipline: Kansantaloustiede
Abstract: My research has been motivated by a strong interest to understand the interplay of innovation and standardization. In the contemporary world, when the technological progress appeals as a leading factor in the development and growth, innovation becomes an important matter to research. At the same time distribution of information grows in scale, turning the interaction between innovation and standardization into more diverse and complicated interplay. This leads to the question of IPR and competition policies. Does standardization enhance innovation or does it become a barrier to it? What is the role of intellectual property rights in this? I use a dynamic general equilibrium model with innovation and standardization to study the interplay of intellectual property rights and innovation. The main references for the present research are papers by D. Acemoglu, G. Garcia and F. Zilibotti “Competing Engines of Growth: Innovation and Standardization” (2010) and by Y. Furukawa “Intellectual Property Protection and Innovation: An Inverted U-Relationship” (2010). The research yields a number of results. There exists a U-shaped relationship between growth and competition, formed by the tension between innovation and standardization. When the cost of innovation is relatively high, both strict and loose IPR policies limit innovation, thus a moderate approach is advised. Standardization can cause a multiple equilibria. The usefulness of IPR policy depends on the start-up cost of innovation.
Subject: innovation
economic growth

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