nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2010‒12‒11
eight papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Policy Complements to the Strengthening of IPRS in Developing Countries - China’s Intellectual Property Environment: A Firm-Level Perspective By Minyuan Zhao
  2. Appropriability and Incentives with Complementary Innovations By Massimo D'Antoni; Maria Alessandra Rossi
  3. Drivers of Academic Research and Patenting in India: Econometric Estimation of the Research Production Function By Amit Shovon Ray; Sabyasachi Saha
  4. Intellectual Property Protection, Regulation and Innovation in Developing Economies - The Case of Indian Pharmaceutical Industry By Basant, Rakesh
  5. Environmental Policy Design Characteristics and Technological Innovation: Evidence from Patent Data By Nick Johnstone; Ivan Hascic; Margarita Kalamova
  6. Induction and Evolution in the Origin of Inventions: Evidence from Smoking Cessation Products By Adam Jaffe; Seth Werfel
  7. The Determinants of Bilateral FDI: Is Asia Different? By Peter A. Petri
  8. Public Procurement of Innovation Diffusion: Exploring the Role of Institutions and Institutional Coordination By Rolfstam, Max; Phillips, Wendy; Bakker, Elmer

  1. By: Minyuan Zhao
    Abstract: Along many dimensions, China has made progress in strengthening the protection of intellectual property (IP) and expanding its research and development (R&D) base over the past two decades. Meanwhile, people’s understanding of IP has gone beyond a mechanical interpretation of patent law or copyright law. Instead, with years of experience in innovation, imitation and knowledge management, firms have begun to realize that IP protection is part of a complex business environment including various cultural, economic and strategic factors. This study takes a firm-level perspective and addresses two related topics. First, the paper examines the IP environment faced by various firms. In particular, the importance of IP protection and the strength of protective measures vary widely depending on the firms’ ownership structures and industry characteristics. Second, the paper analyzes firms’ strategic responses to the perceived IP environment. Firms not only adjust their R&D strategies, but also product and marketing strategies based on their assessment of the IP environment, which may have significant implications for China’s economic development in general. The paper concludes that momentum for IP reform is related to the economic potential in China. Such reform is an on-going system project involving not only patent, trademark and copyright laws, but also privatization policies, trade and FDI policies, as well as the role of the government in China’s innovation strategy.
    Keywords: economic development, innovation, intellectual property rights, patents, China, policy reforms, copyrights, trademarks
    Date: 2010–09–14
  2. By: Massimo D'Antoni; Maria Alessandra Rossi
    Abstract: This article analyzes the effects on ex ante incentives to invest in the development of complementary innovations of two alternative appropriability strategies: a strategy of exclusion of third parties from access (through active enforcement of IPRs or technical means) vis-a-vis an openness strategy, i.e. an ex-ante commitment not to exclude. Assuming that the complementary innovations constitute a common input and that agents make complementary investments in its private exploitation, we find that, when complementarities are sufficiently strong, a commitment to openness may provide greater incentives than an exclusion strategy. The theoretical framework is used to provide an interpretation of Open Source Software licenses and the “Open Science” system.
    Keywords: incentives to innovation, complementarity, intellectual property rights, open source software, open science.
    JEL: L17 O34
    Date: 2010–11
  3. By: Amit Shovon Ray; Sabyasachi Saha (Indian Council for Research on International Economic Relations)
    Abstract: In this paper we attempt to provide a comprehensive understanding of the drivers of academic research and patenting in India. Academic research is conceptualised as a research production process where research inputs (like research time and number of research scholars) are transformed into research outputs in the form of publications and patents. We expect research inputs by a faculty member to be an outcome of his/her own decision-making process, which in turn determine his/her research outputs. Exogenous parameters, like faculty background, faculty attitude, research sponsorship and institutional factors, are expected to influence both set of endogenous variables (research inputs and outputs). We specify this production function as a recursive simultaneous equation model and estimate the structural parameters using standard econometric methods. Our results clearly identify several drivers of academic research and patenting in India, in terms of faculty background, faculty attitude and other parameters, from which we arrive at concrete policy lessons for patenting of academic research in India. In particular, we argue that putting in place institutional structures will not serve the purpose without addressing the fundamental issues of research environment, culture and attitude in the first place. In a sense, therefore, introducing an IPR legislation alone may not act as an instant magic formula to energise Indian academic research for commercial application.
    Keywords: Academic Research, Patents, Bayh-Dole Act, India
    JEL: O31 O34 O38 I23 C51
    Date: 2010
  4. By: Basant, Rakesh
    Abstract: Historically, nations have modified their IP policies to support their development agenda. With the advent of TRIPS, the ability of countries to choose between different IP policy options has reduced considerably but some flexibility remains. Countries have tried to utilize this flexibility for their advantage but in certain respects the choices are difficult. In recent years, certain elements of the new IP regime in India have been vigorously debated in the context of the TRIPS mandated IP policy changes. Given the complex interface between economic development and IP regimes, a variety of arguments have been deployed to argue in favour or against these elements. The paper argues that an evaluation of the IP regime and regulation in developing countries needs to be done in the context of how they facilitate capability building especially through participation of domestic firms in global R&D and production networks. Opportunities for domestic firms to participate in global networks depend on a variety of inter-related factors like emerging technology regimes, changes in global industrial structures, strategies followed by MNCs and capabilities and strategies of domestic firms with respect to innovation. Consequently, the fine-tuning of the IP regime would require an understanding of these developments as well, often in the context of a specific sector. The paper uses this broad heuristic framework to analyze emerging IP policy needs for the Indian pharmaceutical sector and the role of other types of regulation. In the process it also provides some insights on how developing countries with decent technological capabilities can exploit regulatory flexibilities available in the post-TRIPS scenario.
    Date: 2010–11–22
  5. By: Nick Johnstone; Ivan Hascic; Margarita Kalamova
    Abstract: This paper focuses on the issue of innovation and technology transfer in the areas of air pollution abatement, wastewater effluent treatment, solid waste management, and climate change mitigation. The paper describes the trends in innovative activity related to selected areas of pollution abatement and control technologies and their transfer internationally. It also discusses characteristics of environmental policy regimes that are amenable to encouraging innovation of environmental technologies, and provides empirical evidence on the role of various determinants (including general characteristics of countries' environmental policy regimes) in encouraging innovation.<BR>Ce document se concentre sur la question du transfert d’innovation et de technologie dans les domaines de la réduction de pollution atmosphérique, du traitement d’effluent d’eau usagée, de la gestion de déchets solides, et de l’atténuation de changement climatique. Il décrit les tendances dans l’activité innovatrice relative aux technologies de réduction de la pollution et de leur transfert international. Il identifie également les caractéristiques des régimes de politique environnementale favorables à l’innovation environnementale, et établit le lien empirique sur le rôle des diverses causes déterminantes (y compris les caractéristiques générales de la politique environnementale des pays) dans l’innovation environnementale.
    Keywords: environmental policy, innovation, technology, politique environnementale, innovation, technologie
    JEL: O31 O33 Q55 Q56 Q58
    Date: 2010–03–16
  6. By: Adam Jaffe (Department of Economics, Brandeis University); Seth Werfel (Federal Reserve Bank of New York)
    Abstract: Neoclassical economic theory predicts that policies that discourage the consumption of a particular good will induce innovation in a socially desirable substitute. Evolutionary theory emphasizes the possibility of innovation waves associated with the identification of new dominant designs. We incorporate both of these possibilities in a model of the invention of new smoking cessation products, based on a new dataset of patents on such products from 1951-2004. We find that an increase in cigarette tax levels and smoking bans had no discernable impact on the industry-wide rate of invention in smoking cessation products. It does appear, however, that dominant designs did have substantial positive innovation effects. More specifically, the introduction of the nicotine gum and patch are estimated to have increased the rate of patenting activity in smoking cessation products by 60 and 79 percent, respectively, subject to a 10 percent rate of decay. Finally, these products had larger innovation effects at the firm level than among individual inventors.
    Keywords: Patents, Technological Change, Smoking Cessation Products, Cigarette Taxes
    JEL: O31 O38 H23 I18
    Date: 2010–11
  7. By: Peter A. Petri (International Business School, Brandeis University)
    Abstract: Intra-Asian foreign direct investment (FDI) is dominated by flows from high technology economies to medium technology economies, while FDI elsewhere primarily consists of flows among high technology economies. This distinctive pattern is not due simply to differences in the relative distribution of Asian FDI recipients by technology, or to systematic differences in Asia’s technology characteristics. A gravity model analysis is used to explore whether Asian FDI patterns differ significantly from those elsewhere, and if so, in what ways. The results show that Asian FDI flows, in contrast to other FDI flows, systematically favor hosts with relatively low technology achievement and relatively strong intellectual property rights regimes. This type of “Asian exceptionalism” is consistent with “flying geese” theories that have argued that Asian development is the result of technology flows among economies that occupy nearby rungs of the technology ladder.
    Keywords: Foreign Direct Investment, FDI, Asia, Technology Transfer, Gravity Model, Intellectual Property Rights, Flying Geese Paradigm
    JEL: F21 O33 O34
    Date: 2010–03
  8. By: Rolfstam, Max (Sønderborg Participatory Innovation Research Centre, University of Southern Denmark); Phillips, Wendy (Centre for Research in Strategic Purchasing and Supply, School of Management, University of Bath); Bakker, Elmer (Centre for Research in Strategic Purchasing and Supply, School of Management, University of Bath)
    Abstract: The role of the public agency as a pacer of private sector innovation has been emphasised over the recent years, especially in the context of the EU. The general ambition has been to encourage public agencies to actively stimulate private sector innovation by requesting innovation instead of procuring currently existing products. This has also triggered an increased interest among researchers and practitioners to identify examples of best practice where public agencies have successfully procured innovation. Rather than addressing this demand-oriented perspective this paper focuses on the public agency as an adopter of private-sector innovation, and how this mechanism can contribute to innovation in general. The theoretical point of departure is diffusion theory, with an emphasis on the role of institutions as identified in systemic approaches to innovation studies. A particular concern of this paper is those institutions that hinder or enable adoption of an innovation in an organisational context. The paper draws on an explorative case study looking at the introduction of a new catheter into the English National Health Service supply chain and its diffusion among NHS trusts in England. Different institutional factors are identified which have had an affect on the adoption and diffusion.
    Keywords: public procurement; innovation diffusion; institutions; England
    JEL: O30
    Date: 2010–06–01

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