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on Intellectual Property Rights |
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Issue of 2022‒06‒13
two papers chosen by Giovanni Ramello Università degli Studi del Piemonte Orientale “Amedeo Avogadro” |
| By: | Laura Alfaro; Cathy Bao; Maggie X. Chen; Junjie Hong; Claudia Steinwender |
| Abstract: | We investigate how firms adapt to trademark protection, an extensively used but underexamined form of IP protection, by exploring a historical precedent: China's trademark law of 1923 - an unanticipated and disapproved response to end foreign privileges in China. By exploiting a unique, newly digitized firm-employee-level dataset from Shanghai in 1872-1941, we show that the trademark law shaped firm dynamics on all sides of trademark conflicts. The law spurred growth and brand investment among Western firms with greater dependence on trademark protection. In contrast, Japanese businesses, which had frequently been accused of counterfeiting, experienced contractions while attempting to build their own brands after the law. The trademark law also led to new linkages with domestic agents, both within and outside the boundaries of Western firms, and the growth of Chinese intermediaries. At the aggregate level, trademark-intensive industries witnessed a net growth in employment and the number of product categories. A comparison with previous attempts by foreign powers - such as extraterritorial rights, bilateral treaties, and an unenforced trade-mark code - shows that those alternative institutions were ultimately unsuccessful. *Omnia Juncta in Uno ("All Joined in One") was the Latin motto on the municipal seal of the Shanghai International Settlement (1843-1941) and signified the joint governance of foreign powers in the settlement. |
| Keywords: | trademark, firm dynamics, intermediaries, intellectual property institutions |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1827&r= |
| By: | Inderst, Roman; Obradovits, Martin |
| Abstract: | Manufacturers frequently resist heavy discounting of their products by retailers, especially when they are used as so-called loss leaders. Since low prices should increase demand and manufacturers could simply refuse to fund deep price promotions, such resistance is puzzling at first sight. We explain this phenomenon in a model in which price promotions cause shoppers to potentially reassess the relative importance of quality and price, as they evaluate these attributes relative to a market-wide reference point. With deep discounting, quality can become relatively less important, eroding brand value and the bargaining position of brand manufacturers. This reduces their profits and potentially even leads to a delisting of their products. Linking price promotions to increased one-stop shopping and more intense retail competition, our theory also contributes to the explanation of the rise of store brands. |
| Keywords: | loss leading,relative thinking,reference-depending preferences,product positioning,vertical differentiation,price competition,price promotion |
| JEL: | D11 D22 D43 L11 L15 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:253667&r= |