טכניון מכון טכנולוגי לישראל
הטכניון מכון טכנולוגי לישראל - בית הספר ללימודי מוסמכים  
M.Sc Thesis
M.Sc StudentZislis Marat
SubjectEconomic Implications of Intellectual and Capital
Property Rights Policies
DepartmentDepartment of Industrial Engineering and Management
Supervisor Professor Dan Peled


Abstract

Firms’ incentives to invest in capital accumulation and R&D are affected by the tax/transfer and intellectual property rights (IPR) protection regimes under which they operate, which in turn are set by the government. Evaluating such policies requires an analytical framework within which the equilibrium effects of the policies on individual firm behavior and economic aggregates can be computed.


At any moment each firm pays a tax or receives a transfer, in capital and know-how, as a simple fraction of its distance from the relevant average stock of all firms in the economy. Firms choose optimally their investments, taking as given the tax/transfer regime and the trajectory of average stocks in the economy. In equilibrium these perceived trajectories must correspond to the optimally chosen investments they generate. The equilibrium is found numerically for a wide range of environmental and policy parameters and various performance measures are computed. The common growth rate in a stationary equilibrium is affected by the tax/transfer rates of the government policy.


The main results are:

  • The government policy affects firms behavior even when all firms are identical, so that there are no transfers in equilibrium;
  • In the absence of external effects, except for the government inter-firm transfers, the non-intervention policy achieves a Pareto efficient outcome.
  • Given a positive rate of transfer in any one of the stocks, (e.g. a technology spillover), some positive tax/transfer on the other stock improves firm values and growth rates. However, this improvement disappears with higher tax/transfer rates.