nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2007‒02‒17
fourteen papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Innovation, Licensing, and Imitation: The Effects of Intellectual Property Rights Protection and Industrial Policy By Koichi Futagami; Tatsuro Iwaisako; Hitoshi Tanaka
  2. Appendices to Internationally Comparable Science, Technology and Competitiveness Indicators By Robert H. McGuckin; Bart van Ark; Sean M. Dougherty; Robert Inklaar
  3. Cumulative Innovation, Sampling and the Hold-up Problem By Rufus Pollock
  4. Do Spillovers Stimulate Incremental or Drastic Product Innovations? Hypotheses and Evidence from German Establishment Data By Jirjahn, Uwe; Kraft, Kornelius
  5. International Comparisons of R&D Expenditure: Does an R&D PPP make a difference? By Sean M. Dougherty; Robert Inklaar; Robert H. McGuckin; Bart van Ark
  6. Factors Determining the Mode of Overseas R&D by Multinationals: Empirical Evidence By ITO Banri; WAKASUGI Ryuhei
  7. Valuation and Exploitation of Intellectual Property By Shigeki Kamiyama; Jerry Sheehan; Catalina Martinez
  8. The Economics of a Centralized Judiciary: Uniformity, Forum Shopping and the Federal Circuit By Atkinson, Scott; Marco, Alan C.; Turner, John L.
  9. The Further the Better? Knowledge Intensive Service Firms' Collaboration on Innovation By Anker Lund Vinding; Ina Drejer
  10. The Temporal Dimension of Wage Contracts in Oligopoly with Spillovers By Vasileios Zikos
  11. Corporate Skills as an Ex-Ante Incentive to R&D Investment By Mariacristina Piva; Marco Vivarelli
  12. R&D and Firm Performance in a Transition Economy By Czarnitzki, Dirk; Kraft, Kornelius
  13. Detecting Behavioural Additionality An Empirical Study on the Impact of Public R&D Funding on Firms’ Cooperative Behaviour in Germany By Aschhoff, Birgit; Fier, Andreas; Löhlein, Heide
  14. Innovation Activities Abroad and the Effects of Liability of Foreignness: Where it Hurts By Sofka, Wolfgang

  1. By: Koichi Futagami (Graduate School of Economics, Osaka University); Tatsuro Iwaisako (Faculty of Economics, Ritsumeikan University); Hitoshi Tanaka (Graduate School of Economics, Osaka University)
    Abstract: This paper examines the long-run effects of intellectual property rights (IPR) protection and industrial policies on innovation and technology transfer using a North-South quality ladder model where licensing is the main mode of technology transfer to developing countries. We show that the governments of developing countries can promote innovation and technology transfer by strengthening IPR protection, which is enforced by restricting the imitation of products. Moreover, the results also imply that subsidies on the cost of license negotiation can promote innovation and technology transfer, whereas subsidies on the cost of R&D have no effect.
    Keywords: Licensing; Imitation; Innovation; Intellectual property rights;
    JEL: F43 O33 O34
    Date: 2007–02
  2. By: Robert H. McGuckin (The Conference Board); Bart van Ark (The Conference Board and University of Groningen); Sean M. Dougherty (OECD [formerly with The Conference Board]); Robert Inklaar (The Conference Board and University of Groningen)
    Abstract: Report on US National Science Foundation Grant SRS/SES 00-99594
    Keywords: R&D, research, development, innovation, BERD
    JEL: O30 O32 O47 O57
    Date: 2006–05
  3. By: Rufus Pollock
    Abstract: With cumulative innovation and imperfect information about the value of innovations, intellectual property rights can result in hold-up and therefore it may be better not to have them. Extending the basic cumulative innovation model to include 'sampling' by second-stage firms, we find that the lower the cost of sampling, or the larger the differential between high and low value second-stage innovations, the more likely it is that a regime without intellectual property rights will be preferable. Thus, technological change which reduces the cost of encountering and trialling new 'ideas' implies a reduction in the socially optimal level of rights such as patents and copyright.
    Keywords: Cumulative Innovation; Hold-Up; Sampling; Intellectual Property
    JEL: K3 L5 O3
    Date: 2006
  4. By: Jirjahn, Uwe; Kraft, Kornelius
    Abstract: We estimate the determinants of various types of product innovation. Knowledge spillovers from rivals have a positive impact on incremental innovations. This impact is largely independent of the participation in R&D cooperations. Spillovers exert no such independent influence on drastic innovation activities. The results support the hypothesis that establishments face difficulties in using knowledge that comes from areas they are not familiar with. Establishments exploit spillovers for incremental innovations rather than for drastic innovations. To a limited degree R&D cooperations can help to overcome the difficulties in using spillovers for drastic innovations. Furthermore, our estimates provide evidence that a firm’s own R&D effort and the use of outside information are substitutive.
    Keywords: New Products, Patents, Spillovers, Learning, R&D
    JEL: L15 L60 O31 O32
    Date: 2006
  5. By: Sean M. Dougherty (OECD); Robert Inklaar (University of Groningen); Robert H. McGuckin (The Conference Board); Bart van Ark (The Conference Board and University of Groningen)
    Abstract: Purchasing power parities (PPPs) for R&D expenditure in 19 manufacturing industries are developed for France, Germany, Japan, the Netherlands and the United Kingdom relative to the United States for the years 1997 and 1987. These PPPs are based on R&D input prices for specific cost categories and differ substantially from current practice of comparing R&D expenditure using GDP PPPs and deflators. After taking into account differences in the relative price of R&D labor and materials, separate PPPs for other R&D cost categories are less essential, and a simpler version using GDP PPPs for these other categories should suffice. Our preferred PPPs are used to compare international R&D costs and intensity. The results suggest that the efforts devoted to R&D in each country are more similar across countries than is apparent using the nominal R&D intensities that are currently the norm.
    Keywords: R&D, PPP, price indexes, research, development, innovation
    JEL: C43 L16 L60 O32 O47
    Date: 2003–07
  6. By: ITO Banri; WAKASUGI Ryuhei
    Abstract: The large expansion of MNCs' overseas R&D is noteworthy. This paper investigates the factors affecting the expansion of support-oriented R&D and knowledge sourcing R&D by using qualitative data which indicate the modes of R&D conducted at a plant site and a laboratory. The empirical results suggest that (1) the export propensity of affiliate firms, relative abundance of human resources for R&D, and accumulated technological knowledge have a positive effect on both the modes of R&D at a plant site and a laboratory, and (2) the stronger enforcement of intellectual property positively affects the expansion of knowledge sourcing R&D. These results show that not only firm-specific but also country-specific factors positively affect the overseas expansion of R&D.
    Date: 2007–02
  7. By: Shigeki Kamiyama; Jerry Sheehan; Catalina Martinez
    Abstract: As firms shift to more open models of innovation based on collaboration and external sourcing of knowledge, they are exploiting their intellectual property, notably patents, not only by incorporating protected inventions into new products, processes and services, but also by licensing them to other firms or public research organisations (PROs), using them as bargaining chips in negotiations with other firms, and as a means of attracting external financing from banks, venture capitalists and other sources... <P>Valorisation et exploitation de la propriété intellectuelle <BR>A mesure que les entreprises s’orientent vers des modèles d’innovation plus ouverts fondés sur la collaboration et l’exploitation de sources externes de connaissances, elles tirent profit de leur propriété intellectuelle, notamment de leurs brevets, non seulement en intégrant des inventions protégées dans des produits, procédés et services nouveaux, mais aussi en les concédant sous licence à d’autres entreprises ou à des organismes de recherche publics, en les utilisant comme monnaie d’échange dans les négociations engagées avec d’autres entreprises et comme un moyen d’obtenir des financements extérieurs auprès des institutions bancaires, des investisseurs en capital-risque et d’autres sources...
    Date: 2006–06–30
  8. By: Atkinson, Scott (University of Georgia Department of Economics); Marco, Alan C. (Vassar College Department of Economics); Turner, John L. (University of Georgia Department of Economics)
    Abstract: In 1982, the US Congress established the Court of Appeals for the Federal Circuit (CAFC) as the sole appellate court for patent cases. Ostensibly, this court was created to eliminate inconsistencies in the application and interpretation of patent law across federal courts, and thereby mitigate the incentives of patentees and alleged infringers to "forum shop" for a preferred venue. We perform the first econometric study of the extent of non-uniformity and forum shopping in the pre-CAFC era and of the CAFC's impact on these phenomena. We find that in patentee-plaintiff cases the pre-CAFC era was indeed characterized by significant non-uniformity in patent validity rates across circuits and by forum shopping on the basis of validity rates. We find weak evidence that the CAFC has increased uniformity of validity rates and strong evidence that forum shopping on the basis of validity rates ceased several years prior to the CAFC's establishment. In patentee-defendant cases, we find that validity rates are lower on average, but do not find either significant non-uniformity of validity rates across circuits or significant forum shopping.
  9. By: Anker Lund Vinding; Ina Drejer
    Abstract: Three hypotheses in relation to knowledge intensive service firms’ collaboration in relation to development of new services are explored: i) firms with a high level of absorptive capacity are more likely to collaborate on innovation than firms with a relatively low level of absorptive capacity; ii) given that the firms collaborate on innovation, the main innovation partner of knowledge intensive service firms with a high level of absorptive capacity is likely to be located further away than the main innovation partner of firms with a low level of absorptive capacity; and iii) collaboration with distant partners in the innovation process will often be of a more explorative nature than interaction with local partners, thereby associating the innovative output of cross-border collaborations with a higher degree of novelty than collaboration with local/national partners. Hypotheses i and iii are confirmed, whereas the results for hypothesis ii are inconclusive.
    Keywords: Service innovation; absorptive capacity; collaboration
    JEL: O31 L80
    Date: 2006
  10. By: Vasileios Zikos (Dept of Economics, Loughborough University)
    Abstract: This paper examines how the duration of wage contracts influences innovation incentives, wages and employment. We find that wages are non-monotone in the duration of wage contracts. Furthermore, a positive and one-to-one relation between innovation and union utility exists and both attain their highest value under a long-term contract. Profits may vary depending on the extent of R&D spillovers and the associated raising rivals' cost incentive, although they are highest when union/firms engage in a long-term contractual relation. Testable predictions to discriminate between short-term and long-term contracts are also discussed.
    Keywords: Wage contracts; R&D; Spillovers; Raising rivals' cost.
    JEL: J41 J51 L13 O31
    Date: 2007–02
  11. By: Mariacristina Piva (Università Cattolica Piacenza); Marco Vivarelli (Università Cattolica Piacenza, CSGR Warwick, Max Planck Institute of Economics Jena, and IZA)
    Abstract: Using a balanced panel of 215 Italian manufacturing firms over the 1995-2000 period, this paper investigates the determinants of R&D investment at the level of the firm. While finding further support for the well-established technology-push and demand-pull hypotheses, this study also tests the role of skill endowment in increasing a firm’s R&D investment. Consistently with the related managerial and economic literature, our basic result is that current skill endowment may significantly and positively influence a firm’s current R&D decision. These microeconometric results have been obtained using a Least Squares Dummy Variable Corrected (LSDVC) estimator, a recently-proposed panel data technique particularly suitable for small samples.
    Keywords: skills and innovation, R&D expenditures, endogenous skill bias, demand-pull, LSDVC estimator
    JEL: O31
    Date: 2007–01
  12. By: Czarnitzki, Dirk; Kraft, Kornelius
    Abstract: We estimate the effects of R&D on firms' credit ratings and on financial distress. The main purpose is the comparison of firms in Western Germany and Eastern Germany as a transitional economy. Innovative activity has a positive impact on firm value proxied by ratings in Western Germany, but a negative impact in Eastern Germany. We also consider future financial distress, and find that R&D in Eastern German firms leads to higher default risk, in contrast to Western Germany. There, R&D enhances future performance. This result is highly politically relevant, since the high level of subsidies present in Eastern Germany may be subject to misallocation.
    Keywords: Transitional Economy, Credit Rating, Bankruptcy, Innovation, Policy
    JEL: L33 O12 O31 O38 P27
    Date: 2006
  13. By: Aschhoff, Birgit; Fier, Andreas; Löhlein, Heide
    Abstract: Subsidising research networks has become a popular instrument in technology policies, driven mainly by expected positive spillovers. In particular, the stimulation of R&D co-operation between scientific institutions and industry is considered as most promising. In the context of policy evaluation we analyse if public R&D funding is suitable for influencing firms’ collaborative behaviour in the intended way and where applicable, if a lasting change results. The empirical analysis is based on German CIS data and a supplemental telephone survey. Using a nearest-neighbour matching approach we find that R&D funding is indeed a particularly valuable tool for the linking of science into industry R&D partnerships. However, we also show in a bivariate probit analysis that newly initiated R&D co-operations with science are less likely to be continued after funding has ended compared to already existing co-operations. Therefore, the behavioural change induced by public funding is not necessarily longlived.
    Keywords: Public Funding, Firm Behaviour, Policy Evaluation, R&D Co-operation
    JEL: C20 H32 L22 O32 O38
    Date: 2006
  14. By: Sofka, Wolfgang
    Abstract: The innovation activities of foreign subsidiaries have been identified as an important source of competitive advantage for multinational corporations. The success of these engagements depends heavily on tapping host country pools of localized expertise. To achieve this foreign subsidiaries have to overcome cultural and social barriers (liability of foreignness). We derive potential stumbling blocks in the innovation process theoretically and argue that these materialize as neglected projects, cancellations or budget overruns. We test these hypotheses empirically for more than 1,000 firms with innovation activities in Germany from various sectors. We find that foreign-controlled firms are not challenged by liability of foreignness at the project mobilization stage. The lack of local embeddedness becomes more binding as projects have to be prioritized and managed which we identify as more frequent mistakes and delays. We argue that this is the result of shared practices within the multinational firm that do not readily fit into the local context. Finally, we derive management recommendations how foreign innovation engagements can achieve similar levels of effectiveness and efficiency as host country competitors.
    Keywords: Liability of foreignness, offshoring R&D, internationalization, innovation management
    JEL: D83 F23 O31 O32
    Date: 2006

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