nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2007‒11‒03
five papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Economic Growth and Patent Policy: Quantifying the Effects of Patent Length on R&D and Consumption By Chu, Angus C.
  2. Patents only live twice: a patent survival analysis in Europe By Nicolas van Zeebroeck
  3. Star Scientists, Innovation and Regional and National Immigration By Lynne G. Zucker; Michael R. Darby
  4. Do Technology Diffusion Theories Explain the OSS Business Model Adoption Patterns ? By Heli Koski
  5. When Does FDI Have Positive Spillovers? Evidence from 17 Emerging Market Economies By Gorodnichenko, Yuriy; Svejnar, Jan; Terrell, Katherine

  1. By: Chu, Angus C.
    Abstract: Is the patent length an effective policy instrument in stimulating R&D? This paper develops a generalized variety-expanding growth model and then calibrates the model to the aggregate data of the US economy to analyze the effects of extending the patent length. The numerical exercise suggests that at the empirical range of patent-value depreciation rates, extending the patent length beyond 20 years leads to only a very small increase in R&D despite R&D underinvestment in the market economy. On the other hand, shortening the patent length can lead to a significant reduction in R&D and consumption. This paper also makes use of the dynamic general-equilibrium framework to examine the fraction of total factor productivity (TFP) growth that is driven by R&D, and the calibration exercise suggests that about 35% to 45% of the long-run TFP growth in the US is driven by R&D. Finally, this paper identifies and analytically derives a dynamic distortion of the patent length on saving and investment in physical capital that has been neglected by previous studies, which consequently underestimate the distortionary effects of patent protection.
    Keywords: endogenous growth; intellectual property rights; patent length; R&D
    JEL: O34 O31
    Date: 2007–10
  2. By: Nicolas van Zeebroeck (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels.)
    Abstract: The length of patent rights is an issue of considerable importance in the design of patent systems, and its optimality has been intensively discussed in the literature. This dimension – taking the form of the number of years during which a given patent has been maintained – has been considered in the empirical literature as a direct indication of the private value of patents. But the lack of comprehensive data on both the renewal of patents and their characteristics has prevented so far any systematic analysis of the determinants of this duration. Relying on a comprehensive dataset including detailed information on all patent applications filed to the European Patent Office from 1980 to 2000 and on the renewal of those of them that were granted, this paper presents a survival time analysis of the determinants of patent length in Europe. The results are threefold: first, they clearly establish that patent rights have significantly increased in length over the past decades despite a small decline in the average grant rate, and due to the dilatation of the examination process and higher maintenance rates. Second, they show that some filing strategies induce considerable delays in the examination process, possibly to the benefits of the patentee, but most certainly to the expense of legal uncertainty on the markets and undue exploitation of the provisional protection granted to pending applications by the European Patent Convention. And third, they confirm that more valuable patents (more cited or covering a larger geographical scope) take more time to be processed and live longer, whereas more complex applications are associated with longer decision lags but also with lower grant and renewal rates. These results have many policy implications for technology markets, patent systems and all their stakeholders.
    Keywords: Patent length, Patent value, Renewals, Granting Process, Survival Time Analysis
    JEL: O31 O34 O50
    Date: 2007–10
  3. By: Lynne G. Zucker; Michael R. Darby
    Abstract: We follow the careers 1981-2004 of 5401 star scientists listed in ISI HighlyCitedSM as most highly cited by their peers. Their number in a US region or a top-25 science and technology (S&T) country significantly increases the probability of firm entry in the S&T field in which they are working. Stars, rather than their disembodied discoveries, are key for high-tech entry. Stars become more concentrated over time, moving disproportionately from areas with few peers in their discipline to many -- except for a countercurrent of some foreign-born American stars returning home. High impact articles and university articles all tend to diffuse. America has 62 percent of the world's stars as residents, primarily because of its research universities which produce them. Migration plays a significant role in some developing countries.
    JEL: J61 L26 O14 O31
    Date: 2007–10
  4. By: Heli Koski
    Abstract: ABSTRACT : This paper addresses the question of the software companies’ timing of adoption of the open source software (OSS) business models comprising the supply of OSS products and/or services. The game-theoretic technology adoption models do not explain well the observed diffusion patterns of the OSS business model among the sample of 716 European software firms. Instead, it seems that the network effects influentially shape the diffusion path of the OSS supply strategies. Our study further contributes to the technology diffusion literature as our econometric model aims at separating, unlike the previous empirical studies on technology diffusion, the role that the replacement effect has in the diffusion patterns of new technologies. Our data detect a clear replacement effect hindering the incumbents’ investments in new technology. The expected price declines of the computer programs – and thus the expected declining license revenues from the proprietary software – accelerate less the incumbent firms’ timing of adoption of the OSS supply model than that of the entrants.
    Keywords: timing of technology adoption, diffusion, open source software, business models
    JEL: C41 D21 D23 L2 L86 O14
    Date: 2007–10–29
  5. By: Gorodnichenko, Yuriy; Svejnar, Jan; Terrell, Katherine
    Abstract: We use firm-level data and national input-output tables from 17 countries over the 2002-2005 period to test new and existing hypotheses about the impact of foreign direct investment (FDI) on the efficiency of domestic firms in the host country (i.e., spillovers). Providing evidence from a larger sample of countries and greater variety of firms than existing studies, with separate estimates by firm size, age, and sector, we show: a) backward spillovers (stemming from supplying a foreign firm in the host country or exporting to a foreign firm) are consistently positive; b) horizontal spillovers are mostly insignificant but positive for older firms and firms in the service sector; d) forward spillovers (from purchasing from foreign firms or importing) are also positive only for old and service sector firms. We find no support for the hypothesis that spillovers are greater for FDI with more advanced technology. While efficiency of domestic firms’ is affected by the business environment, the strength of FDI spillovers is not, either when measured by the degree of corruption, bureaucratic red tape or by differences across regions that vary in terms of development. Testing whether spillovers vary with the firm’s “absorptive capacity” we find: i) distance from the efficiency frontier tends to dampen horizontal spillovers in manufacturing and backward spillovers among old firms; ii) whereas firms with a larger share of university educated workforce are more productive, they do not enjoy greater FDI spillovers than firms with less educated workers. FDI spillovers hence vary by sectors and types of firms.
    Keywords: efficiency; FDI; spillovers; transition economies
    JEL: F23 O16 P23
    Date: 2007–10

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