nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2007‒12‒15
seventeen papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Internationalisation of Patent Systems and New Developments in Globalising World By Ants Kukrus; Raul Kartus
  2. Is Distance Dying at Last? Falling Home Bias in Fixed Effects Models of Patent Citations By Rachel Griffith; Sokbae Lee; John Van Reenen
  3. Does Patenting negatively impact on R&D investment?An international panel data assessment By Alexandre Almeida; Aurora A.C. Teixeira
  5. Proprietà intellettuale ed industria farmaceutica: Ricerche nel campo della proprietà intellettuale dei farmaci By Amisano, Franco; Cassone, Alberto
  6. Innovation Theories : Relevance and Implications for Developing Country Innovation By Andréanne Léger; Sushmita Swaminathan
  7. Academic Entrepreneurship - social norms, university culture and policies By Braunerhjelm, Pontus
  8. The effects of institutional change on innovation and productivity growth in the Swedish pharmaceutical industry. By Malmberg, Claes
  9. Path-following or Leapfrogging in Catching-up: the Case of Chinese Telecommunication Equipment Industry. By Liu, Xielin
  10. What Makes Foreign Knowledge Attractive to Domestic Innovation Managers? By Sofka, Wolfgang
  11. Innovation Capabilities: Technology Use, Productivity Growth and Business Performance: Evidence from Canadian Technology Surveys By Baldwin, John R.; Gellatly, Guy
  12. Innovation and Market Concentration in Europe's Mobile Phone Industries. Evidence from the Transition from 2G to 3G By Klaus S. Friesenbichler
  13. International Cooperation on Innovation: Empirical Evidence for German and Portuguese Firms By Faria, Pedro; Schmidt, Tobias
  14. Taxation and R&D: An Investigation of Push and Pull Effects By Kenneth James McKenzie; Natalia Sershun
  15. Review of the Literature on the Impact of Mergers on Innovation By Schulz, Norbert
  16. Innovation in Business Groups By Sharon Belenzon; Tomer Berkovitz
  17. Cooperation in knowledge-intensive firms By Kvaløy, Ola; Olsen, Trond E.

  1. By: Ants Kukrus (Department of Public Economy at Tallinn University of Technology); Raul Kartus (Department of Public Economy at Tallinn University of Technology)
    Abstract: Deepening contradictions on the global level between the industrially developed countries and developing countries emerged in 2001 when the World Intellectual Property Organisation (WIPO) announced the Patent Agenda on the initiative of the industrially developed countries. The main source of the contradictions was the draft Substantive Patent Law Treaty (SPLT) with the intention to establish higher protection standards than provided by the TRIPS Agreement. The developing countries wish to protect genetic resources and traditional knowledge in the framework of patent law. The goal of industrially developed countries is strengthening of legal protection of inventions and harmonisation of the laws. The USA, Japan and the European Patent Organisation, whose patent offices (so-called Trilateral Partners) have started creation of new patent systems (New Route, Patent Prosecution Highway, Triway), are actually most interested in it. The European Patent Organisation has designed a network of cooperation between the European patent offices (European Patent Network). Due to the contradictions with the developing countries work on substantive patent law harmonisation takes place outside WIPO in ‘B+ Group’ of industrially developed countries.
    Keywords: WIPO Patent Agenda, Substantive Patent Law Treaty (SPLT), new patent systems, new route, patent prosecution highway, triway, B+ group, European Patent Network
    JEL: K10 K41
    Date: 2007
  2. By: Rachel Griffith; Sokbae Lee; John Van Reenen
    Abstract: We examine the "home bias" of international knowledge spillovers as measured by the speedof patent citations (i.e. knowledge spreads slowly over international boundaries). We presentthe first compelling econometric evidence that the geographical localization of knowledgespillovers has fallen over time, as we would expect from the dramatic fall in communicationand travel costs. Our proposed estimator controls for correlated fixed effects and censoring induration models and we apply it to data on over two million citations between 1975 and1999. Home bias declines substantially when we control for fixed effects: there is practicallyno home bias for the more "modern" sectors such as pharmaceuticals andinformation/communication technologies.
    Keywords: Fixed effects, home bias, patent citations, knowledge spillovers
    JEL: O32 O33 F23
    Date: 2007–08
  3. By: Alexandre Almeida (Faculdade de Economia, Universidade do Porto); Aurora A.C. Teixeira (INESC Porto; CEMPRE, Faculdade de Economia, Universidade do Porto)
    Abstract: Although the conventional R&D-patents relationship is a long stand and relatively undisputed issue within the innovation literature, the reverse causality, in particular, the potential for a negative impact of patents over R&D has only recently received wide attention boosting interesting (mainly) theoretical debates. The macroeconomic perspective on this issue, however, remains largely unexplored. In fact, no evidence exists that ruled out the possibility of asymmetric effects of patents on R&D in accordance to the level of GDP in general, and to ‘convergence clubs’ in particular. Using panel data estimation methods on a sample of 88 countries, over an eight-year period (1996-2003), and controlling for clubs of convergence to account for differences on countries’ stages of economic development, we found mix support to the negativity of patent on R&D investment. The accumulated patents positively impact on R&D intensity for the set of less developed countries whereas no statistically significant effect emerges in the case of higher developed converge clubs; restricting the highest developed convergence club down to countries with a R&D intensity above 3%, the negativity reverse causality arises, corroborating the asymmetric impact of patents on R&D investment. We further demonstrate that albeit causality appears to be stronger in the most intuitive appealing traditional direction, evidence supports the theoretical conveyed double causality between R&D and Patent.
    Keywords: Patents; R&D; panel data; convergence clubs
    JEL: O31 O34
    Date: 2007–12
  4. By: Wilhelmsson, Mats (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: Accumulation of human capital is essential for economic growth. An important question is how knowledge spillover into innovations and production. One way of knowledge diffusion is within innovation networks. We investigate innovative networks in patent data in Sweden from 1994-2001. We define research networks with the help of direct and indirect ties among inventors. The main result clearly indicates that those researchers that collaborating, in innovation networks, improves the efficiency of the innovation process by getting more patents applications approved. The odds getting a patent application approved are in the range 1.1 to 1.5 times better if an application is a result from research collaboration. Moreover, the result suggests that collaboration is more important in the IT sector than in the mechanical engineering sector. Finally, the empirical outcomes indicate that networking is more important in less dense areas compared to the denser labor markets. Thus, networks in such areas might be a substitute for agglomeration advantages.
    Keywords: Innovation network analysis; patents; success and failure in innovation
    JEL: N34 O31 R11
    Date: 2007–12–11
  5. By: Amisano, Franco; Cassone, Alberto
    Abstract: The purpose of the paper is to analyse the complez relationship between Intellectual Property (IP) and Pharmaceutical Industry. Chapter 1 introduces the main issues of Intellectual Property, Innovation and Scientific Research. Chapter 2 surveys alternative measures to the protection of IP, such as public subsidies for research and innovation and public purchase of intellectual property rights. Chapter 3 analyzes different incentives for innovation on the demand side. Chapter 4 deals with the peculiar characters of the innovation in the Pharmaceutical Industry . Chapter 5 analyzes alternatives incentives on the supply side. Chapter 6 studies incentives schemes on the demand side for the Pharmaceutical Industry . Chapter 7 summarizes some tentative conclusive remarks and set an agenda for future research.
    Date: 2007–12
  6. By: Andréanne Léger; Sushmita Swaminathan
    Abstract: Innovation is at the basis of economic development and as such, it is instrumental for developing countries. We review the literature on innovation from the perspectives of four select branches of economics to build a conceptual framework of innovation applicable to developing countries. The conceptual framework includes insights from the surveyed literature and identifies areas of further research. Finally, we conclude with policy recommendations for innovation policies in developing countries highlighting the fact that intellectual property protection is not likely to be at the basis of innovation in these countries.
    Keywords: Innovation, Development, Absorptive Capacity
    JEL: O31 B41 P20
    Date: 2007
  7. By: Braunerhjelm, Pontus (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: Is a shift in intellectual property rights to universities the key instrument in increasing com-mercialization of publicly funded research? How much can actually be learned from the U.S. system, disregarding the ongoing debate as to whether the U.S. do actually outperform Europe in terms of commercializing university based research? Taking Sweden as a role model I claim that this policy will not work. This allegation stems from the analysis of a unique data-base giving individual university researchers view on participation in commercialization of public research, their commercialization experiences, and the obstacles researchers claim exist to increase academic entrepreneurship. Despite researchers positive attitudes towards engag-ing in commercial activities, the university culture, weak incentive structures and badly man-aged support facilities impede the creation of efficient links to markets. I conclude that meas-ures must be taken at primarily the national level, but also at the university level, to enhance commercialization activities.
    Keywords: academic entrepreneurship; commercialization; links; policies
    JEL: J24 O31 O57
    Date: 2007–12–11
  8. By: Malmberg, Claes
    Abstract: The relation between innovative output from the R&D process and total factor productivity (TFP) in the Swedish pharmaceutical industry has been investigated. The focus has been on the 1960s when the institutional conditions for innovation changed drastically in the pharmaceutical industry through new and stricter regulation. The short term effect of the new regulation was a shift towards quality products. Patenting increased and there were an increasing number of economically successful drugs based on new substances (NCEs). This had a positive impact on TFP growth.
    JEL: O31 O32 O33 O34 O38 N5 O47 R58
    Date: 2007
  9. By: Liu, Xielin
    Abstract: In this paper, by reviewing the development of telecommunication equipment industry from fixed phone switches to later 3G, TD-SCDMA, we conclude that the degree of matching between existing foreign products with Chinese market is the primary incentive for Chinese companies to catch-up. The possibility to redesign the existing foreign product to match the market needs in China leads to further opportunity to catch-up. The accessibility of knowledge through government support, alliance with foreign companies or R&D work shapes the capability of Chinese companies to catch-up. The government support is important but not dominated. Leapfrogging strategy will meet more tough problems than path-following. Government plays a more important role in the leapfrogging than the path-following catching-up process. Open to the world and encouraging the collaboration and alliance activity can give companies in the developing countries more opportunity to access the latest knowledge. In the dynamic and advanced industry, FDI can be a very important factor for the technology transfer and catching-up.
    JEL: O31 O32 O33 O34 O38 N5 O47 R58
    Date: 2007
  10. By: Sofka, Wolfgang
    Abstract: This study focuses on the early stages of international innovation activities, i.e. the organizational processes through which promising ideas from around the globe are collected and evaluated. We ask: What characteristics make foreign knowledge interesting to domestic R&D managers? We envision this process as a balancing act between direct transaction costs for communication and coordination and indirect transaction costs from overlooking or misinterpreting important global trends. These hypotheses are tested through a conjoint analysis among 158 heads of R&D departments of German high-tech firms. We find that uncertainty avoidance is the most important driver. Radically new ideas from dynamic markets are most attractive and must not be overlooked. Complementarities with existing knowledge stocks and low language barriers are also important but to a lesser degree. Interestingly, we find no distinction between market and technological impulses.
    Keywords: Globalization, sensing, innovation impulses, conjoint analysis
    JEL: F23 O31 O32
    Date: 2007
  11. By: Baldwin, John R.; Gellatly, Guy
    Abstract: This paper summarizes the results of several research studies conducted by the Micro-economic Analysis Division of Statistics Canada that investigate the impact of advanced technology use on business performance. These studies combine establishment-level survey data on advanced technology practices with longitudinal data that measure changes in relative performance. Together, these studies provide strong evidence that technology strategies have considerable bearing on competitive outcomes after other correlates of plant performance are taken into account. Advanced communications technologies warrant special emphasis, as the use of these technologies has been shown to be closely associated with changes in relative productivity.
    Keywords: Science and technology, Business performance and ownership, Manufacturing,
    Date: 2007–12–05
  12. By: Klaus S. Friesenbichler (WIFO)
    Abstract: Aiming at both low prices and innovation, policy makers and economists have long argued about the optimal intensity of competition. While the current discussion in telecommunication regulation points out that competition can be detrimental to innovation due to the low appropriability of rents established economic approaches advocate competition to be conducive to innovation. This reflects the dispute in economics between Schumpeterian and neoclassical theories. Aghion et al. (2005) offered reconciliation by modelling an inverted U relationship, which in this paper I test for European mobile phone providers. Innovation is measured by a service launch indicator and R&D investments, and competition is approximated by market concentration. As markets are clearly defined, problems of market definition which usually blur concentration indices are avoided. I find robust and statistically significant support for the tested quadratic relationship for both innovation indicators. The innovation optimising Herfindahl-Hirschman laid around 5,500 between 2001 and 2003, but may however vary over time. This finding points at a conflict in the realisation of the regulatory objectives of low prices and innovation at the same time.
    Keywords: Innovation, R&D, market concentration, inverted U, mobile telecommunication research and Development
    Date: 2007–11–20
  13. By: Faria, Pedro; Schmidt, Tobias
    Abstract: In this paper we investigate the factors that lead firms to cooperate with partners from foreign countries on innovation activities. Portuguese and German data from the harmonised Community Innovation Survey (CIS III) allow us to compare innovation cooperation behaviour of private firms in the two countries. Using a bivariate probit model, we show that the characteristics of firms cooperating with foreigners in both countries are quite similar. International activities other than cooperation, firm size and the importance of protection methods for knowledge have a positive influence in both countries on the decision to cooperate with foreign partners. Some differences remain, however: In Germany, exporters are more likely to cooperate with foreign partners than non-exporters, whereas in Portugal this is not the case.
    Keywords: International cooperation, Innovation, CIS III, Germany, Portugal
    Date: 2007
  14. By: Kenneth James McKenzie; Natalia Sershun
    Abstract: We investigate the extent to which direct tax subsidies that lower the user cost of undertaking R&D (the "push" effect) and the overall competitiveness of the production tax system (the "pull" effect) independently impact upon aggregate R&D intensity across countries. The "push" effect of direct tax subsidies is measured by the after-tax user cost of R&D capital, and the "pull" effect of the production tax regime is measured by the effective tax rate on marginal production costs (ETRMC), which aggregates the marginal effective tax rates on production inputs (labour and capital) into an effective excise tax rate. A panel data set of nine countries over nineteen years is used to estimate a dynamic fixed effects model of aggregate R&D intensity. The short-run elasticity of the ratio of R&D to output with respect to the "push" effect of direct tax subsidies is significant, ranging from -0.15 to -0.22, while the long-run elasticity ranges from -0.46 to -0.77, depending upon the specification. The "pull" effect of the overall production tax system, as measured by the ETRMC, is significant as well, with the short-run elasticity ranging from -0.19 to -0.31 and the long-run elasticity from -0.58 to -0.93.
    Date: 2007–12–01
  15. By: Schulz, Norbert
    Abstract: Both M&A and innovation are instruments for growth and competitive advantage. Therefore they are fundamental to each firm’s competitive strategy. Usually, both instruments have been studied separately, but much less in conjunction. This is unfortunate as both processes - the process of innovation and the process of mergers and acquisitions - are intimately connected. The impact of mergers on innovation can only be rigorously assessed, if the converse direction of influence - mergers caused by innovation - is accounted for. Therefore this review tries to take a balanced view on both processes and to point out links between them. Nevertheless, the focus is on the impact of mergers on innovation. This discussion paper is identical with an older version with the title ‘Review on the Literature of Mergers on Innovation’.
    Keywords: innovation incentives, market structure, merger incentives
    JEL: L10 L25 O31
    Date: 2007
  16. By: Sharon Belenzon; Tomer Berkovitz
    Abstract: Using novel data on European firms, this paper examines the effect of business group affiliation oninnovation. We find that business groups foster the scale and novelty of corporate innovation. Groupaffiliation is particularly important in industries that rely more on external finance and have a higherdegree of information asymmetry. We also find that the innovation of affiliates is less sensitive tooperating cash flows. We interpret our results as supporting the 'bright side' of business groupinternal capital markets and explain how legal boundaries between group affiliates mitigate theinefficiencies found in internal capital markets of US conglomerates.
    Keywords: business groups, innovation, internal capital markets
    JEL: G34 L22 L26 O32
    Date: 2007–11
  17. By: Kvaløy, Ola (Norwegian School of Hotel Management, Dept. of Business Administration, University of Stavanger); Olsen, Trond E. (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration)
    Abstract: The extent to which a knowledge-intensive firm should induce cooperation between its employees is analyzed in a model of relational contracting between a firm (principal) and its employees (two agents). The agents can cooperate by helping each other, i.e. provide effort that increases the performance of their peer without affecting their own performance. We extend the existing literature on agent-cooperation by analyzing the implications of incomplete contracts and agent hold-up. A main result is that if the agents' hold-up power is sufficiently high, then it is suboptimal for the principal to implement cooperation, even if helping effort is productive per se. This implies, contrary to many property rights models, that social surplus may suffer if the investing parties (here the agents) are residual claimants. The model also shows that long-term relationships facilitate cooperation even if the agents cannot monitor or punish each others effort choices.
    Keywords: Relational contracts; multiagent moral hazard; endogenous hold-up
    JEL: D23 J33 L14
    Date: 2007–11–30

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