Time: 2:30-3:30 pm, Friday Apr 17

Location: IB 1047

Guest Speaker: Yibai Yang, Associate Professor in the Department of Economics at University of Macau

Abstract: This paper reexamines the relationship between financial development and the economic impact of patent policy. We present country-level empirical evidence that patent protection is more likely to stimulate economic growth at low levels of financial development. We explore the micro-foundations of this result in a large sample of Chinese firms. We find that financially constrained firms exhibit a strong preference for patents over trade secrets, while firms concerned about competitor imitation favor secrecy. To interpret these patterns, we develop a general equilibrium growth model featuring innovative firms that endogenously choose between patents and secrecy. This choice depends on innovation size, the relative effectiveness of secrecy in deterring imitation, and the ability of patents to lower borrowing costs by mitigating financial frictions. We demonstrate that greater financial development decreases the cost-reducing effect of patenting, incentivizes more firms to choose secrecy, and reduces the economic benefits from strengthening patent protection.

Bio: Yibai Yang is currently an Associate Professor in the Department of Economics at University of Macau. He received PhD in Economics from University of Sydney, Australia. His research areas include economic growth, innovation, and intellectual property rights. His works has been published in journals such as Review of Economic Dynamics, European Economic Review, Journal of Money, Credit and Banking, Journal of Economic Behavior and Organization, and Economic Research Journal. He received grants from National Natural Science Foundation of China and Guangdong Natural Science Foundation. He is an Associate Editor for Economic Modelling and Economic Analysis and Policy.