nep-ino New Economics Papers
on Innovation
Issue of 2009‒06‒17
eight papers chosen by
Steffen Lippert
Massey University Department of Commerce

  1. Do Patent Pools Encourage Innovation? Evidence from the 19th-Century Sewing Machine Industry By Ryan L. Lampe; Petra Moser
  2. What if Congress Doubled R&D Spending on the Physical Sciences? By Richard Freeman; John Van Reenen
  3. Monetary and Implicit Incentives of Patent Examiners By Langinier, Corinne; Marcoul, Phillipe
  4. Accounting for Research and Productivity Growth Across Industries By L. Rachel Ngai; Roberto M. Samaniego
  5. The Spatial Evolution of Innovation Networks: A Proximity Perspective By Ron Boschma; Koen Frenken
  6. Search of Prior Art and Revelation of Information by Patent Applicants By Langinier, Corinne; Marcoul, Phillipe
  7. Appropriate IPRs, Human Capital Composition and Economic Growth By Fabio Manca
  8. Intellectual Property Rights Enforcement in Imperfect Markets By Jiahua Che; Larry Qiu; Wen Zhou

  1. By: Ryan L. Lampe; Petra Moser
    Abstract: Members of a patent pool agree to use a set of patents as if they were jointly owned by all members and license them as a package to other firms. Regulators favor pools as a means to encourage innovation: Pools are expected to reduce litigation risks for their members and lower license fees and transactions costs for other firms. This paper uses the example of the first patent pool in U.S. history, the Sewing Machine Combination (1856-1877) to perform the first empirical test of the effects of a patent pool on innovation. Contrary to theoretical predictions, the sewing machine pool appears to have discouraged patenting and innovation, in particular for the members of the pool. Data on stitches per minute, as an objectively quantifiable measure of innovation, confirm these findings. Innovation for both members and outside firms slowed as soon as the pool had been established and resumed only after it had dissolved.
    JEL: D02 K0 K21 L2 L24 L4 N11 N4 N7 O3 O31 O32 O34 O38
    Date: 2009–06
  2. By: Richard Freeman; John Van Reenen
    Abstract: Many business, academic, and scientific groups have recommended that the Congress substantiallyincrease R&D spending in the near future. President Bush's American Competitiveness Initiative callsfor a doubling of spending over the next decade in selected agencies that deal with the physical sciences, including the National Science Foundation. We consider the rationale for government R&D spending in the context of globalization and as an investment in human capital and knowledge creation with gestation times far longer than Federal funding cycles. To assess the impact of a large increase in R&D spending on the science job market, we examine the impact of the 1998- 2003 doubling of the NIH budget on the bio-medical sciences. We find that the rapid increase in NIH spending and ensuing deceleration created substantial adjustment problems in the market for researchand failed to address long-standing problems with scientific careers that are likely to deter many young people from choosing a scientific career. We argue that because research simultaneouslyproduces knowledge and add to the human capital of researchers, which has greater value for youngscientists because of their longer future career life span than to older scientists, there is reason for funding agencies to tilt their awards to younger researchers.
    Keywords: Basic Science, R&D, labor markets for scientists, globalization
    JEL: J23 J45
    Date: 2009–05
  3. By: Langinier, Corinne (University of Alberta, Department of Economics); Marcoul, Phillipe (Department of Rural Economy, University of Alberta)
    Abstract: Patent examiners, who are often accused of granting questionable patents, might lack proper incentives to carefully scrutinize applications. Furthermore, they have outside options and leave the patent office. It is thus interesting to investigate whether their granting behavior is affected by career concerns. In a simple setting, we analyze different incentive schemes that reward examiners on the basis of rejected and/or accepted patents. We then study the effect of career concerns on the granting behavior of examiners. We find that a reward based on rejection gives more incentives to search for relevant information, and career concerns increase these incentives. Besides, the information provided by the applicant has an impact on the examiners incentive to search for information.
    Keywords: patent examiners; career concerns
    JEL: J60 O34
    Date: 2009–05–30
  4. By: L. Rachel Ngai; Roberto M. Samaniego
    Abstract: What factors underlie industry differences in research intensity and productivity growth? Wedevelop a multi-sector endogenous growth model allowing for industry specific parameters inthe production functions for output and knowledge, and in consumer preferences. We findthat industry differences in both productivity growth and R&D intensity mainly reflectdifferences in "technological opportunities", interpreted as parameters of knowledgeproduction. These include the capital intensity of R&D, knowledge spillovers, anddiminishing returns to R&D. Among these parameters, we find that the degree of diminishingreturns to R&D is the dominant factor when the model is calibrated to account for crossindustrydifferences in the US.
    Keywords: Multisector growth, total factor productivity, R&D intensity, technologicalopportunity
    JEL: D24 O3 O41
    Date: 2009–03
  5. By: Ron Boschma; Koen Frenken
    Abstract: We propose an evolutionary perspective on the geography of network formation that is grounded in a dynamic proximity framework. In doing so, we root the proximity concept in an evolutionary approach to the geography of innovation networks. We discuss three topics. The first topic focuses on explaining the structure of networks. The second topic concentrates on explaining the effects of networks on the performance of actors. The third topic deals with the changing role of proximity dimensions in the formation and performance of innovation networks in the longer run.
    Keywords: evolutionary economic geography, knowledge networks, innovation networks, dynamic proximity
    JEL: R0 R1 R12
    Date: 2009–06
  6. By: Langinier, Corinne (University of Alberta, Department of Economics); Marcoul, Phillipe (Department of Rural Economy, University of Alberta)
    Abstract: We examine the strategic non-revelation of information by patent applicants. In a model of a bilateral search of information, we show that patent applicants may conceal information, and that examiners make their screening intensity contingent upon the received information. We then analyze the effects of a double review policy and a policy in which examiners ex ante commit to screening efforts. The implementation of the former policy reduces strategic non-revelation, but its overall implication remains unclear. The latter policy involves equal screening intensity across all applications, requires a limited commitment power and induces truthful revelation.
    Keywords: patents; information; incentives
    JEL: D83 O31 O34
    Date: 2009–05–30
  7. By: Fabio Manca (Faculty of Economics, University of Barcelona)
    Abstract: We generalize a standard technology diffusion model by allowing for IPRs regimes to be endogenously defined by the development level of each country. Also we insert differences in the composition of human capital between North (leader) and South (followers) which shape the relative costs of innovation and imitation. Results show how an optimal growth trajectory is found for the follower country which initially imitates and that, once a "threshold development stage" is reached, optimally switches to innovation by fully enforcing IPRs achieving a higher proximity with the technology frontier in the long-run. Other scenarios, such as a premature increase in the enforcement of IPRs or a switch from imitation to innovation at early stages of development of the followers are found to be sub-optimal.
    Keywords: IPRs, Human capital, Technology transfer.
    Date: 2009–06
  8. By: Jiahua Che; Larry Qiu; Wen Zhou
    Date: 2009–06–08

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