nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2016‒03‒06
five papers chosen by
Giovanni Ramello
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. The dynamic relationship between investments in brand equity and firm profitability: Evidence using trademark registrations By Crass, Dirk; Czarnitzki, Dirk; Toole, Andrew A.
  3. Research and development strategy for environmental technology in Japan: A comparative study of the private and public sectors By Fujii, Hidemichi; Managi, Shunsuke
  4. Knowledge Spillovers, absorptive capacity and growth: An Industry-level Analysis for OECD Countries By Ioannis Bournakis; Dimitris Christopoulos; Sushanta Mallick
  5. Digitization, Copyright, and the Welfare Effects of Music Trade By Luis Aguiar; Joel Waldfogel

  1. By: Crass, Dirk; Czarnitzki, Dirk; Toole, Andrew A.
    Abstract: Most marketing practitioners and scholars agree that marketing assets such as brand equity significantly contribute to a firm's financial performance. In this paper, we model brand equity as an unobservable stock that results from up to thirty years of past brand-related investment flows. Using firm-specific trademarks as investment proxies, our results show a significant long-run impact on financial performance. The dynamic profile of brand-related investments has an inverted-U shape that reaches its peak after eleven years. On average, it takes four years before brand related investments show a positive return, and investments older than nineteen years show no significant impact. For the median trademarking firm, brand equity contributes 265,000 Euro to annual profits.
    Keywords: Brand Equity,Firm Profitability,Intellectual Property Rights,Trademarks
    JEL: O31 O34
    Date: 2016
  2. By: Uday Bhanu Sinha (Departments of Economics, Delhi School of Economics, University of Delhi, India)
    Abstract: We consider a mechanism for optimizing the value of a patent owned by an independent patent holder who is not a producer in the market. We consider two kinds of cost reducing innovations: “common innovation” and “new technology innovation” in a homogeneous good Cournot market with ex-ante asymmetric costs of production. We show that the value of the patent is maximized when the patent holder sells the patent to the efficient firm at a fixed payment who would further license the innovation to its rival. This patent sale dominates all other licensing mechanisms for both kinds of innovations.
    Keywords: Patent sale; licensing; asymmetric firms; cost reducing innovation; auction; fixed fee; royalty, two part tariff
    JEL: D43 D44 D45 L13 O32 O33
    Date: 2015–08
  3. By: Fujii, Hidemichi; Managi, Shunsuke
    Abstract: Environmental protection technology plays an important role in a sustainable society, simultaneously promoting economic development and pollution control. This study examines the determinants of technology inventions related to environmental protection in Japan. We use patent application data in a decomposition analysis framework. We find that environmental patent applications increase according to the prioritization of environmental patents by private companies and according to efficiency improvements in patent applications in the public sector. Additionally, patent applications related to emissions trading increased rapidly among private companies, mainly due to their increased priority after 2005. The different determinants of environmental technologies between the private and public sectors are useful for formulating effective policies to promote environmental innovation.
    Keywords: Green invention; decomposition analysis; research and development strategy; patent data; log mean Divisia index
    JEL: O32 Q55
    Date: 2016–02
  4. By: Ioannis Bournakis; Dimitris Christopoulos; Sushanta Mallick
    Abstract: Given the decline in growth momentum in the manufacturing sector in many OECD countries, the role of knowledge-based capital has emerged as a key driver for sustained growth. While empirical studies on estimating knowledge spillovers have usually been undertaken at the country level, the spillover effects can be more definitive only if the analysis is conducted at the industry-level. The effectiveness of international spillovers is conditional on recipient country’s absorptive capacity and this is an important component of the spillover mechanism that has not attracted significant attention so far. This paper therefore assesses the effect of spillovers in driving per capita output growth taking into account the role of absorptive capacity. Our main findings are first, that there is evidence for a robust positive relationship between human capital and output growth across these countries at industry level. Second, the potential of international spillover gains is greater in countries with higher human capital and a more protective environment as far as intellectual property rights are concerned. Countries that improve their absorptive capacity can potentially increase gains from spillovers either via trade or FDI (including vertical FDI). Finally, significant heterogeneity is found between high and low-tech industries with high-tech group displaying greater knowledge spillovers, suggesting that low-tech industries need to be more innovative in order to absorb the technological advancements of domestic and international rivals.
    Keywords: Growth; R&D; Knowledge Spillovers; Absorptive Capacity; Human Capital; Intellectual Property Rights.
    JEL: E24 F1 O3 O4
    Date: 2015–04
  5. By: Luis Aguiar (European Commission - JRC - IPTS); Joel Waldfogel (University of Minnesota - Carlson School of Management)
    Abstract: Since the launch of the iTunes Music Store in the US in 2003 and in much of Europe in the following years, music trade has shifted rapidly from physical to digital products, raising the availability of products in dierent countries. Despite substantial growth in availability, the available choice sets of digital music have not fully converged across countries. The territorial fragmentation of the EU copyright management regime and related cross-border transaction costs are often perceived as an obstacle to greater availability. However, other factors such as commercial strategies by music producers may also aect availability. EU policy makers are now contemplating various possibilities to reduce these cross-border trade costs and improve convergence in music availability across countries. This raises the question of how much benet these policy measures would create for consumers and producers in Europe and around the world. This study calculates the economic benets for consumers and producers from further trade opening or trade cost reductions in digital music. We address this question using comprehensive Nielsen data on digital track sales in the US, Canada, 13 EU Member States, and 2 other European countries (Norway and Switzerland) from 2006 to 2011. We estimate a structural model of music demand which allows us to obtain the consumer surplus for consumers in each destination country as well as the revenue for producers in each origin country. Our model allows us to simulate several scenarios. We rst compare the baseline current situation (the \status quo") with full autarky whereby only local music is available in each country - a big step backwards compared to the status quo. We then compare the status quo with a fully open EU Digital Single Market whereby all European music is available in all EU countries. Finally, we simulate worldwide openness in which all music is available in all countries. We estimate both consumer surplus benets and producer revenue eects for these scenarios. Not surprisingly, the current status quo music trade benets consumers everywhere compared to the autarky scenario. Relative to autarky, status quo trade raises aggregate consumer surplus in the 17 countries by about e300 million (a 11.3% increase). Trade also raises producer revenue by e85 million (a 2.8% increase). European consumers benet more from music trade than North Americans. However, it has large benets for American producers but on balance small benets to European producers. American producers have a larger market share in Europe that European producers have in the US. Moving from the current status quo to an EU Digital Single Market for music would increase consumer surplus from digital music consumption by 1.8 per cent (e19 million) and music producers'revenue by 1.1 per cent (e10 million). Benets vary considerably across Member States. Under worldwide frictionless trade consumers in 15 European countries gain e31 million (a 3% increase) while North American consumers gain e6.5 million (a 0.35% increase). Most of the gains from fully frictionless trade - about two thirds - are accomplished by a European single market. Annual gains from worldwide frictionless trade for producers, compared to autarky, reach 1.9% in Europe and 0.38% in the US. Clearly, the additional gains from moving beyond a European Digital Single Market to a worldwide open market would be small for European producers and consumers. Digital music production and consumption is only a small part of all media markets covered by copyright. We note that the gures presented here represent only a fraction of the potential benets from further trade opening in other digital media.
    Keywords: music, digitization, digital media, online markets, downloading, international trade,
    Date: 2014–11

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