nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2013‒11‒22
eight papers chosen by
Giovanni Ramello
Universita' Amedeo Avogadro

  1. Patent Value and Citations: Creative Destruction or Strategic Disruption? By David S. Abrams; Ufuk Akcigit; Jillian Popadak
  2. The Impact of Formal Institutions on Knowledge Economy By Antonio R. Andrés; Asongu Simplice; Voxi S. H. Amavilah
  3. The technological origins and novelty of breakthrough inventions. By Arts, Sam; Veugelers, Reinhilde
  4. Institutional Change and Academic Patenting: French Universities and the Innovation Act of 1999. By Della Malva, Antonio; Lissoni, Francesco; Llerena, Patrick
  5. QWERTY and the search for optimality By Neil M Kay
  6. Understanding Media Markets in the Digital Age: Economics and Methodology By Brett Danaher; Samita Dhanasobhon; Michael D. Smith; Rahul Telang
  7. From Bricks to Brains: Increasing the Contribution of Knowledge-based Capital to Growth in Ireland By David Haugh
  8. Modeling Preference Change through Brand Satiation By Nobuhiko Terui; Shohei Hasegawa

  1. By: David S. Abrams; Ufuk Akcigit; Jillian Popadak
    Abstract: Prior work suggests that more valuable patents are cited more and this view has become standard in the empirical innovation literature. Using an NPE-derived dataset with patent-specific revenues we find that the relationship of citations to value in fact forms an inverted-U, with fewer citations at the high end of value than in the middle. Since the value of patents is concentrated in those at the high end, this is a challenge to both the empirical literature and the intuition behind it. We attempt to explain this relationship with a simple model of innovation, allowing for both productive and strategic patents. We find evidence of greater use of strategic patents where it would be most expected: among corporations, in fields of rapid development, in more recent patents and where divisional and continuation applications are employed. These findings have important implications for our basic understanding of growth, innovation, and intellectual property policy.
    JEL: K1 L2 O3
    Date: 2013–11
  2. By: Antonio R. Andrés (Eastern Mediterranean University); Asongu Simplice (Yaoundé/Cameroun); Voxi S. H. Amavilah (Glendale College, Economics, USA)
    Abstract: Using Kauffman, Kraay, and Mastruzzi governance indicators, this article analyzes the impact of formal institutions on the knowledge economy- by assessing how the enforcement of Intellectual Property Rights (IPRs) through good governance mechanisms affects the knowledge economy. The article also employs the World Bank’s four components of the knowledge economy index characteristic of its knowledge for development (K4D) framework. We estimate panel data models for 22 Middle East & North African and Sub-Sahara African countries over the period 1996-2010. The results show that for this group of countries the enforcement of IPR laws (treaties), although necessary, is not a sufficient condition for a knowledge economy. The results also suggest that other factors are more likely to determine the knowledge economies of these nations. Overall these findings have important implications for both policy and further research.
    Keywords: Formal institutions; Knowledge economy; Panel data; Principal component analysis (PCA)
    JEL: O10 O34 O38 P00 P48
    Date: 2013–06
  3. By: Arts, Sam; Veugelers, Reinhilde
    Abstract: We explore the relationship between the technological origins and novelty of inventions on the one hand and their technological impact on the other hand. In particular, we are interested into the technological origins and novelty of breakthrough inventions. By jointly looking at the effects of the origins and novelty on an invention’s average impact, on the likelihood of a very poor invention, and on the likelihood of a breakthrough, we identify some trade-offs researchers face when exploring breakthroughs. For evidence, we consider the US patent record in biotechnology from 1976 to 2001. Our analysis shows that breakthroughs in biotechnology rely more on non-technical and technical prior art, particularly more recent technical prior art, prior art from many different technology fields, and prior art from unfamiliar technology fields. Yet, breakthroughs are less likely to have a dissimilar set of technical prior art citations, as they are more likely to use prior art previously cited by many other inventions. Besides differences in the origins, we find significant differences in the technological novelty. Breakthroughs are more novel in the sense that they are more likely to recombine technological components for the first time in history, particularly more familiar technological components.
    Keywords: origins; novelty; breakthrough; invention; biotechnology; patents;
    Date: 2013–01
  4. By: Della Malva, Antonio; Lissoni, Francesco; Llerena, Patrick
    Date: 2013
  5. By: Neil M Kay (Department of Economics, University of Strathclyde)
    Abstract: This paper shows how one of the developers of QWERTY continued to use the trade secret that underlay its development to seek further efficiency improvements after its introduction. It provides further evidence that this was the principle used to design QWERTY in the first place and adds further weight to arguments that QWERTY itself was a consequence of creative design and an integral part of a highly efficient system rather than an accident of history. This further serves to raise questions over QWERTY’s forced servitude as “paradigm case†of inferior standard in the path dependence literature. The paper also shows how complementarities in forms of intellectual property rights protection played integral roles in the development of QWERTY and the search for improvements on it, and also helped effectively conceal the source of the efficiency advantages that QWERTY helped deliver.
    Keywords: QWERTY, invention, path dependence, path creation, patents, trade secrets
    Date: 2013–10
  6. By: Brett Danaher; Samita Dhanasobhon; Michael D. Smith; Rahul Telang
    Abstract: Digitization raises a variety of important academic and managerial questions around firm strategies and public policies for the content industries, with many of these questions influenced by the erosion of copyright caused by Internet file-sharing. At the same time, digitization has created many new opportunities to empirically analyze these questions by leveraging new data sources and abundant natural experiments in media markets. In this chapter we describe the open “big picture” questions related to digitization and the copyright industries, and discuss methodological approaches to leverage the new data and natural experiments in digital markets to address these questions. We close our chapter with a specific proof of concept research study that analyzes an important academic and managerial question — the impact of legitimate streaming services on the demand for piracy. We use ABC's decision to add its content to as a natural experiment and show that it resulted in an economically and statistically significant drop in piracy of that content.
    JEL: K42 L38 L82 O3 O34
    Date: 2013–11
  7. By: David Haugh
    Abstract: With sound framework conditions, fine universities, good infrastructure and policies friendly towards foreign direct investment, Ireland scores high in international innovation scoreboards. Overall, policies to boost innovation and entrepreneurship are on the right track, but investment in knowledge-based capital could be made a more dynamic source of growth and jobs. While Ireland has made good progress towards building up its scientific capabilities, innovation capacity remains weaker than in other small advanced OECD countries, such as Austria, Denmark, Sweden and Switzerland. To become more effective, the innovation strategy should be simplified, with a drastic reduction in the number of government agencies involved in funding innovation, so as to better focus on strengthening the linkages between the business and academic communities. While attracting high-tech multinationals should remain central, there is potential to better develop spillovers between these firms and domestic SMEs, notably by establishing applied research centres. Entrepreneurship should be fostered by improving the business environment, including access to non-bank finance, streamlining the insolvency regime and transfer of intellectual property rights, and upgrading the broadband network. This working paper relates to the 2013 Economic Survey of Ireland ( De l'économie traditionnelle à l'économie du savoir : Accroître la contribution du capital intellectuel à la croissance en Irlande Avec des conditions-cadres propices, des universités de qualité, une bonne infrastructure et des politiques favorables à l’investissement direct étranger, l’Irlande figure en bonne place sur les tableaux de bord internationaux de l’innovation. Dans l’ensemble, les politiques de stimulation de l’innovation et de l’entrepreneuriat vont dans la bonne direction, mais il serait possible de faire de l’investissement en capital intellectuel une source plus dynamique de croissance et d’emplois. Si l’Irlande a bien progressé du point de vue du renforcement de ses capacités scientifiques, sa capacité d’innovation reste plus faible que celle d’autres petites économies avancées de l’OCDE, comme l’Autriche, le Danemark, la Suède et la Suisse. Pour devenir plus efficace, la stratégie d’innovation doit être simplifiée, avec une réduction draconienne du nombre d’organismes publics qui participent au financement de l’innovation, de façon à mieux se focaliser sur le resserrement des liens entre les entreprises et les milieux universitaires. Même s’il doit rester essentiel d’attirer des multinationales de haute technologie, il est possible de favoriser davantage les retombées entre ces entreprises et les PME nationales, notamment en créant des centres de recherche appliquée. Il faudrait stimuler l’entrepreneuriat en améliorant les conditions d’activité des entreprises, notamment l’accès aux financements non bancaires, la simplification du régime de faillite et le transfert de droits de propriété intellectuelle, et en mettant à niveau le réseau haut débit. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de l’Irlande, 2013 (
    Keywords: venture capital, higher education, innovation, Ireland, entrepreneurship, science, start-ups, internationalisation, R&D tax credits, insolvency, SME financing, intellectual property rights, direct foreign investment, ICT infrastructure, investissement direct, enseignement supérieur, Irlande, capital risque, droits de propriété intellectuelle, infrastructure des TIC, crédit d’impôt en faveur de la R-D, internationalisation, financement des PME, jeunes entreprises, coûts des faillites, science, entrepreneuriat, innovation
    JEL: F21 G24 O31 O32 O33 O34
    Date: 2013–11–12
  8. By: Nobuhiko Terui; Shohei Hasegawa
    Abstract: In this study, we develop structural models of preference change due to consumer state dependence through satiation by purchase experience. A dynamic factor model with switching structure is proposed to explain consumer preference changes. Two types of dynamic factor models are separately applied to baseline and satiation parameters in a direct utility model that accommodates multiple discreteness data. The first dynamic factor model has a switching structure for consumer preference, and decomposes brand baselines into time-invariant factor loadings for the coordinates of brand positions and time-varying factor scores for consumer preference directions. The second dynamic factor model applied to satiation parameters extracts the consumer level of satiation in a product category, and this is used as a causal variable in a switching equation to show when and how preferences change over time according to the level of brand satiation. The brand positions and temporal changes of heterogeneous preferences are jointly depicted in a dynamic joint space map. The empirical analysis of a panel dataset shows that our proposed dynamic model, implying that consumers change their preferences when previous brand satiation exceeds the admissible level and preference directions are determined by the previous level of satiation, performs better than alternative specifications, such as a static model with no preference change and a dynamic model without structures which imply that preference changes whenever a consumer purchases a product.
    Date: 2013–04

This nep-ipr issue is ©2013 by Giovanni Ramello. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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