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on Intellectual Property Rights |
| By: | Pierre M. Picard (CREA, University of Luxembourg (Luxembourg), and CORE, Université catholique de Louvain (Belgium).); Bruno van Pottelsberghe de la Potterie (Université Libre de Bruxelles (ULB), SBS-EM, ECARES, CEB, DULBEA, CEPR and Bruegel) |
| Abstract: | The present paper discusses the role of quality in patent systems from the perspective of patent offices' behavior and organization. After documenting original stylized facts, the paper presents a model in which patent offices set patent fees and the quality level of their examination processes. Various objectives of patent offices' governors are considered. We show that the quality of the patent system is maximal for the patent offices that maximises either the social welfare or its own proffit. Quality is lower for the self-funded patent office maximizing the number of patent applications and even smaller for the self-funded patent office maximizing the number of granted patents. A labor union improves examination quality and may compensate for the potentialy inappropriate objectives of patent office management. |
| Keywords: | Patent system, quality, intellectual property, public firm organization |
| JEL: | L30 O30 O31 O34 O38 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:11-06&r=ipr |
| By: | Chu, Angus C.; Cozzi, Guido; Galli, Silvia |
| Abstract: | This study develops an R&D-based growth model with vertical and horizontal innovation to shed some light on the current debate on whether patent protection stimulates or stifles innovation. We analyze the effects of patent protection in the form of blocking patents. We show that patent protection changes the direction of innovation by having asymmetric effects on vertical innovation (i.e., quality improvement) and horizontal innovation (i.e., variety expansion). Calibrating the model and simulating the transition dynamics, we find that strengthening the effect of blocking patents stifles vertical innovation and decreases economic growth but increases social welfare due to an increase in horizontal innovation. In light of this finding, we argue that in order to properly analyze the growth and welfare implications of patents, it is important to consider their often neglected compositional effects on vertical and horizontal innovation. |
| Keywords: | economic growth; innovation; intellectual property rights |
| JEL: | O34 O31 O40 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31019&r=ipr |
| By: | Ashish Arora; Sharon Belenzon; Luis A. Rios |
| Abstract: | We study the relationship between decentralization of R&D, innovation and firm performance using a novel dataset on the organizational structure of 1,290 American publicly-listed corporations, 2,615 of their affiliate firms, as well as characteristics of 594,903 patents that they hold. We explore the tension between centralization and decentralization of R&D, which trades off between responsiveness to immediate and local business needs and the type of research that can benefit the firm as a whole. To do this, we develop two novel measures of decentralization. First, using intra-firm patent assignments, we distinguish between patents that are assigned to the inventing unit rather than to corporate headquarters. Second, we exploit the variation between firms which posses a central corporate R&D labs and those that do not. We find that centralized R&D tends be more scientific, broader in scope, and have more technical impact, while being more likely in firms that operate within a narrower range of businesses, in complex technologies, or that are less reliant upon acquisitions. Additionally, we find that firms with a more decentralized structure, on average, invest less in R&D, generate fewer patents per R&D, and exhibit greater sales growth and higher market value. We discuss several theories that can explain these relationships, as well as potential avenues for future research. |
| JEL: | D23 D83 L22 O32 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17013&r=ipr |
| By: | Thomas J. Holmes; Ellen R. McGrattan; Edward C. Prescott |
| Abstract: | It is widely believed that an important factor underlying the rapid growth in China is increased foreign direct investment (FDI) and the transfer of foreign technology capital, which is accumulated know-how from investment in research and development (R&D), brands, and organizations that is not specific to a plant. In this paper, we study two channels through which FDI can contribute to upgrading of the stock of technology capital: knowledge spillovers and appropriation. Knowledge spillovers lead to new ideas that do not directly compete or devalue the foreign affiliate’s stock. Appropriation, on the other hand, implies a redistribution of property rights over patents and trademarks; the gain to domestic companies comes at a loss to the multinational company (MNC). In this paper we build these sources of technology capital transfer into the framework developed by McGrattan and Prescott (2009, 2010) and introduce an endogenously-chosen intensity margin for operating technology capital in order to capture the trade-offs MNCs face when expanding their markets internationally. We show that economic outcomes differ dramatically depending on the source of greater openness and the channel with which technology capital transfer is operative. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmwp:687&r=ipr |
| By: | Granlund, David (The Swedish Retail Institute and Umeå University); Yesim Köksal, Miyase (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | What has been the effect of competition from parallel imports on prices of locally-sourced onpatent drugs? Did the 2002 Swedish mandatory substitution reform increase this competition? To answer these questions, we carried out difference-in-differences estimation on monthly data for a panel of all on-patent prescription drugs sold in Sweden during the 40 months from January 2001 through April 2004. On average, facing competition from parallel imports caused a 15-17% fall in price. While the reform increased the effect of competition from parallel imports, it was only by 0.9%. The reform, however, did increase the effect of therapeutic competition by 1.6%. <p> |
| Keywords: | parallel imports; pharmaceutical drugs; price competition; reference pricing; therapeutic competition |
| JEL: | I11 L51 L65 |
| Date: | 2011–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0496&r=ipr |
| By: | Heike Belitz; Marius Clemens; Christian von Hirschhausen; Jens Schmidt-Ehmcke; Axel Werwatz; Petra Zloczysti |
| Abstract: | We develop a composite indicator measuring the performance of national innovation systems. The indicator takes into account both "hard" factors that are quantifiable (such as R&D spending, number of patents) and "soft" factors like the assessment of preconditions for innovation by managers. We apply the methodology to a set of 17 industrialized countries on a yearly basis between 2007 and 2009. The indicator combines results from public opinion surveys on the process of change, social capital, trust and science and technology to achieve an assessment of a country's social climate for innovation. After calculating and ranking the innovation indictor scores for the 17 countries, we group them into three classes: innovation leader, middle group and end section. Using multiple sensitivity analysis approaches, we show that the indicator reacts robustly to different weights within these country groups. While leading countries like Switzerland, the USA and the Nordic countries have an innovation system with high scores and ranks in every sub indicator, the middle group consisting among others of Germany Japan, the UK and France, can be characterized by higher variation within ranks. In the end section, countries like Italy and Spain have bad scores for almost all indicators. |
| Keywords: | National systems of innovation, composite indicators, ranking |
| JEL: | O30 C81 H52 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1129&r=ipr |
| By: | Davide Castellani (Department of Economics, Finance and Statistics, Università di Perugia); Alfredo Jimenez Palmero (Department of Economics and Business Administration, University of Burgos, Spain); Antonello Zanfei (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo") |
| Abstract: | The negative effect of distance is justified by the existence of transport costs which hamper the international exchange of final and intermediate goods, and by higher uncertainty about local markets. We submit that distance plays a remarkably different role in the case of R&D FDIs since they mainly involve the international transfer, absorption and use of knowledge. Using data on bilateral investment projects in R&D, manufacturing and other business activities between 58 countries, we find that geographic distance does not hinder R&D FDIs as much as in the case of production and other investment activities. Furthermore, once we control for institutional and psychic distance, in particular language and religious differences, the negative effect of geographic distance vanishes. |
| Keywords: | Multinational Firms, International Business, Technological Change, Choices and Consequences, Diffusion Processes. |
| JEL: | F23 O33 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:urb:wpaper:11_06&r=ipr |