nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2010‒10‒23
seven papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. A Tale of Two Growth Engines: The Interactive Effects of Monetary Policy and Intellectual Property Rights By Angus C. Chu; Ching-Chong Lai; Chih-Hsing Liao
  2. Employment Growth from the Small Business Innovation Research Program By Link, Albert; Scott, John
  3. Information Disclosure in Innovation Contests By Thomas Rieck
  4. Who Do Scientists in Public Research Institutions Cooperate with Private Firms? By David B. Audretsch; Werner Bönte; Stefan Krabel
  5. Incentive Pay or Windfalls: Remuneration for employee inventions in Japan By ONISHI Koichiro; OWAN Hideo
  6. Revenue Sharing as Compensation for Essential Inputs By Richard Watt
  7. Universities as Research Partners By Hall, Bronwyn; Link, Albert; Scott, John

  1. By: Angus C. Chu (Shanghai University of Finance and Economics, China); Ching-Chong Lai (Institute of Economics, Academia Sinica, Taipei, Taiwan); Chih-Hsing Liao (National Chengchi University)
    Abstract: How do intellectual property rights that determine the market power of firms influence the effects of monetary policy on economic growth and social welfare? To analyze this question, we develop a monetary R&D-based growth model with elastic labor supply. We find that monetary expansion reduces growth and welfare through a decrease in labor supply that reduces R&D; furthermore, a larger market power of firms strengthens these effects of monetary policy in the R&D model. In contrast, increasing the market power of firms dampens the effects of monetary policy in the AK model. In other words, the market power of firms has surprisingly opposite implications on the growth and welfare effects of monetary policy under the two growth engines (i.e., innovation versus capital accumulation). Finally, we simulate the transition dynamics of the R&D-based growth model to compute the complete welfare changes from reducing inflation.
    Keywords: economic growth, inflation, monetary policy, patent policy, R&D
    JEL: O30 O40 E41
    Date: 2010–10
  2. By: Link, Albert (University of North Carolina at Greensboro, Department of Economics); Scott, John (University of North Carolina at Greensboro, Department of Economics)
    Abstract: This paper investigates employment growth in small firms funded by the U.S. Small Business Innovation Research (SBIR) program. Using data collected by the National Research Council for each of five federal agencies, our analysis shows that on average over two-fifths of all projects retained 0 employees after completion and over one-third retained only 1 or 2 employees. Thus, on average, the direct impact of SBIR funded projects on employment is small, especially when compared to the mean number of employees in the firms. However, there are substantial cross-project differences in the number of retained employees that are explained by differences in the firms and their SBIR projects. We find across funding agencies that projects with intellectual property—patents, copyrights, trademarks, or publications—retained more employees after completion of the project. Also, we find that the public funding of research by the SBIR program is more likely to stimulate employment when the government created a market for the products, processes, or services developed by the research projects.
    Keywords: small business research; employment growth; entrepreneurship; intellectual property
    JEL: J48 L53 O38
    Date: 2010–10–11
  3. By: Thomas Rieck
    Abstract: In innovation contests, the progress of the competing firms in the innovation process is usually their private information. We analyze an innovation contest in which research firms have a stochastic technology to develop innovations at a fixed cost, but their progress is publicly announced. We make a comparison with the case of no information revelation: if the progress is disclosed, the expected profit of the firms is higher, but the expected profit of the sponsor is lower. Additionally, we show that firms may voluntarily reveal their information.
    Keywords: contest, innovation, information revelation
    JEL: O32 D82 D72
    Date: 2010–09
  4. By: David B. Audretsch; Werner Bönte; Stefan Krabel
    Abstract: As public research institutions are increasingly pressured to transfer research results to industry, evaluation of their performance is not only based on their scientific output but also on their commercialization success. Although it is well known that research cooperation activities are an important channel of knowledge transfer, the knowledge about factors driving research cooperation is limited. This paper explicitly focuses on scientist perspective and investigates the relevance of academic values and perceived costs and benefits of cooperation for a scientist's decision to cooperate with private firms. Our analysis is based on two survey waves performed with scientists in the Max Planck Society in Germany which is a publicly funded research organization focusing on basic research. Our empirical results suggest that open science identity is an important determinant of scientist fundamental decision to cooperate with private firms at all. The decision to keep on cooperating with private firms is directly influenced by cost sharing incentives and by firms' confidentiality requirements. Besides these direct effects, our results suggest that perceived reputational reward, monetary benefits, and time costs associated with cooperation influence cooperation behavior indirectly through their impact on the attractiveness of cooperation. The latter is a strong and robust predictor of cooperation behavior.
    Date: 2010
  5. By: ONISHI Koichiro; OWAN Hideo
    Abstract: This paper summarizes historical developments in Japan’s legal treatment of firms’ invention remuneration policies and examines the impact of such policies on R&D performance using original data from surveys including the 2005 IIP Invention Remuneration Survey, the 2007 RIETI Inventor Survey and its 2008 follow-up survey. Tracking the linkages between remuneration policy and R&D performance is complicated by Japanese firms’ reluctance to reveal the details of their policies to their employees before the 2004 amendment of Japan’s Patent Law. By matching the data from firm-level and individual-level surveys, we find that nearly 40% of inventors believed that their firms did not have revenue-based remuneration although their employers reported they actually had instituted such policies. We estimate the effect of revenue-based remuneration policies on R&D performance using two policy variables for the incidence of contingent remuneration policies, one of which depends on the firms’ responses and the other on individual employees’ survey responses.
    Date: 2010–10
  6. By: Richard Watt (University of Canterbury)
    Abstract: Essential inputs are an important topic of debate for economics. One common essential input is intellectual property, in the form of either patents or copyrights, which the producers of goods and services for final consumption must necessarily purchase from the input supplier. The ensuing monopoly power of the input supplier leads in many cases to controversial outcomes, in which social inefficiencies can occur. In much of the literature on the economics of intellectual property, it is assumed that the right holder is remunerated either by a fixed payment or by a payment that amounts to an additional marginal cost to the user, or both. However, in some significant instances in the real-world, right holders are constrained to use (or may choose to use) a compensation scheme that involves revenue sharing. That is, the right holder takes as remuneration a part of the user’s revenue. In essence, the remuneration is set as a tax on the user’s revenue. This paper analyses such remuneration mechanisms, establishing and analysing the optimal tax rate, and also the Nash equilibrium tax rate that would emerge from a fair and unconstrained bargaining problem. The second option provids a rate that may be useful for regulatory authorities.
    Date: 2010–10–07
  7. By: Hall, Bronwyn (University of California at Berkeley, Department of Economics); Link, Albert (University of North Carolina at Greensboro, Department of Economics); Scott, John (University of North Carolina at Greensboro, Department of Economics)
    Abstract: Universities are a key institution in the US innovation system and an important aspect of their involvement is the role they play in Private-Public Partnering activities. This study seeks to gain a better understanding of the performance of university-industry research partnerships using a sample survey of pre-commercial research projects funded the U.S. government's Advanced Technology Program. Although results must be interpreted cautiously due to the small size of the sample, the study finds that projects with university involvement tend to be in areas involving "new" science and therefore experience more difficulty and delay but also are more likely not to be aborted prematurely. We interpret this finding to imply that universities are contributing to basic research awareness and insight among the partners in ATP-funded projects.
    Keywords: university; research
    JEL: O30
    Date: 2010–10–11

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