nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2012‒08‒23
eight papers chosen by
Rui Baptista
Technical University of Lisbon

  1. Do Patent Pools Encourage Innovation? Evidence from 20 U.S. Industries under the New Deal By Ryan L. Lampe; Petra Moser
  2. Schumpeterian Patterns of Innovation and the Sources of Breakthrough Inventions: Evidence from a Data-Set of R&D Awards By Roberto Fontana,; Alessandro Nuvolari,; Hiroshi Shimitzu,; Andrea Vezzulli.
  3. Vertical integration, market floreclosure and quality investment. By Hernán, Roberto; Kujal, Praveen
  4. The Case Against Patents By Michele Boldrin; David K Levine
  5. Determinants of R&D Cooperation in Small and Medium-Sized Enterprises By Hyunbae Chun; Sung-Bae Mun
  6. Protection of basic research and R&D incentives in an international setting By Aoki, Reiko; Kao, Tina
  7. Patents versus R&D subsidies in a Schumpeterian growth model with endogenous market structure By Chu, Angus C.; Furukawa, Yuichi
  8. Technical progress and product reliability under competition and monopoly By George, Donald A R

  1. By: Ryan L. Lampe; Petra Moser
    Abstract: Patent pools, which allow competing firms to combine their patents, have emerged as a prominent mechanism to resolve litigation when multiple firms own patents for the same technology. This paper takes advantage of a window of regulatory tolerance under the New Deal to investigate the effects of pools on innovation within 20 industries. Difference-in-differences regressions imply a 16 percent decline in patenting in response to the creation of a pool. This decline is driven by technology fields in which a pool combined patents for substitute technologies by competing firms, suggesting that unregulated pools may discourage innovation by weakening competition to improve substitutes.
    JEL: K0 L4 N22 O3
    Date: 2012–08
  2. By: Roberto Fontana,; Alessandro Nuvolari,; Hiroshi Shimitzu,; Andrea Vezzulli.
    Abstract: This paper examines the relationship between Schumpeterian patterns of innovation and the generation of breakthrough inventions. Our data source for breakthrough inventions is the “R&D 100 awards” competition organized each year by the magazine Research & Development. Since 1963, this magazine has been awarding this prize to 100 most technologically significant new products available for sale or licensing in the year preceding the judgment. We use instead USPTO patent data to measure the relevant dimensions of the technological regimes prevailing in each sector and, on this basis of this information, we provide a characterization of each sector in terms of the Schumpeter Mark I/Schumpeter Mark II archetypes. Our main finding is that breakthrough inventions are more likely to emerge in “turbulent” Schumpeter Mark I type of contexts.
    Date: 2012–07
  3. By: Hernán, Roberto; Kujal, Praveen
    Abstract: We study incentives to vertically integrate in an industry with vertically differentiated downstream firms. Vertical integration by one of the firms increases production costs for the rival. Increased production costs negatively affects quality investment both by the integrated firm and the unintegrated rival. Quality investment by both firms decreases under any (vertical integration) scenario. The decrease in quality invesment by both firms softens competition among downstream firms. By integrating first, a firm always produces the high quality good and earns higher profits. A fully integrated industry, with increased product differentiation, is observed in equilibrium. Due to increase in firm profits, social welfare under this structure is greater than under no integration.
    Keywords: Vertical integration; Quality investment; Market power; Product differentiation;
    JEL: L15 L22 L42
    Date: 2012–04
  4. By: Michele Boldrin; David K Levine
    Date: 2012
  5. By: Hyunbae Chun (Department of Economics, Sogang University, Seoul); Sung-Bae Mun (Korea Information Society Development Institute, Kwachun, Kyunggi-do, 427-710 Korea)
    Abstract: We investigate the determinants of R&D cooperation in small and medium-sized enterprises (SMEs). Using firm-level data from the 2002 Korean Innovation Survey and applying a probit model with sample selection, we find that incoming spillovers of knowledge have a significant and positive impact on SMEs¡¯ decisions to engage in R&D cooperation. In particular, the effect of knowledge spillovers on R&D cooperation is much larger for smaller firms. Despite the importance of external knowledge for SMEs, the estimation results suggest that SMEs may be at a disadvantage in establishing external R&D linkages because of their absolute size limitations.
    Keywords: R&D Cooperation, Small and Medium-Sized Enterprises, Spillovers
    JEL: L20 O32
    Date: 2012
  6. By: Aoki, Reiko; Kao, Tina
    Abstract: We look at cumulative innovations and the protection of basic research which does not carry stand-alone commercial values in an international setting. Due to the complementarity of the innovations, we ・d that for some parameter range, technology leading countries do not always prefer the strongest protection standard. On the other hand, technology lagging countries do not always prefer the weakest protection standard. Intellectual property rights may be an instrument to soften R&D competition in the development stage and may be used to coordinate R&D efforts. Our model suggests that there may be less disputes on intellectual property right standards among countries in industries characterised by sequential innovations.
    Date: 2012–07
  7. By: Chu, Angus C.; Furukawa, Yuichi
    Abstract: This letter explores the different implications of patent breadth and R&D subsidies on economic growth and endogenous market structure in a Schumpeterian model. We find that the two policy instruments have the same positive effect on economic growth when the model exhibits scale effects under a fixed number of firms. When the model becomes scale-invariant under an endogenous number of firms, patent breadth increases economic growth but decreases the number of firms, whereas R&D subsidies increase the number of firms but decrease economic growth.
    Keywords: economic growth; endogenous market structure; patents; R&D subsidies
    JEL: O30 O40
    Date: 2012–08
  8. By: George, Donald A R
    Abstract: Technical progress lowers costs and prices but appears to have an ambiguous effect on product reliabilty. This paper presents a simple model which explains this observation.
    Date: 2012

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