Jianhuan Xu

Singapore Management University

This paper explores a potential “dark side” of patent trade in reinforcing monopolists’ market power. We analyze how the patent trade boom affects new innovations and industry dynamics. While easier patent trade encourages more patent creation, these new patents disproportionately benefit existing monopolists, who are more likely to acquire them. Using an endogenous growth model with patent trade, we show that subsidizing patent transactions may shift investors' research focus toward monopolists, further entrench their market power, and ultimately reduce social welfare. An optimal subsidy policy should account for the initial misallocation in the invention market.

Prof Jianhuan Xu is an associate professor in the Economics Department at Singapore Management University. His research focuses on broad topics in macro-development and growth, with an emphasis on productivity, innovation, and labor market dynamics. He is especially interested in understanding how heterogeneity shapes aggregate outcomes and its implications for policy. To address these questions, he combines quantitative macroeconomic modelling, causal inference methods, and rich micro-level data.