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on Technology and Industrial Dynamics |
| By: | Ernst, Christof; Richter, Katharina; Riedel, Nadine |
| Abstract: | This paper examines the impact of tax incentives on corporate research and development (R&D) activity. Traditionally, R&D tax incentives have been provided in the form of special tax allowances and tax credits. In recent years, several countries moreover reduced their income tax rates on R&D output (patent boxes). Previous papers have shown that all three tax instruments are effective in raising the quantity of R&D related activity. We provide evidence that, beyond this quantity effect, corporate taxation also distorts the quality of R&D projects, i.e. their innovativeness and revenue potential. Using rich data on corporate patent applications to the European patent office, we find that a low tax rate on patent income is instrumental in attracting innovative projects with a high earnings potential and innovation level. The effect is statistically signficant and economically relevant and prevails in a number of sensitivity checks. R&D tax credits and tax allowances are in turn not found to exert a statistically significant impact on project quality. -- |
| Keywords: | corporate taxation,patent quality,micro data |
| JEL: | H3 H7 J5 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:13010&r=tid |
| By: | Gambardella, Alfonso; Harhoff, Dietmar; Verspagen, Bart |
| Abstract: | Patent holders may choose to protect innovations with single patents or to develop portfolios of multiple, related inventions. We propose a simple decision-making model in which patent-holders may allocate resources to either expanding the number of related patents or investing in higher value of patents in the portfolio. We estimate the derived value equation using portfolio value data from an inventor survey. We find that investments in individual inventions exhibit diminishing returns, and that much of the value of a portfolio depends on adding new inventions. These effects are less pronounced in high-techology industries, when the inventions rely on external information, and when the inventor holds a doctorate. We also find higher returns to an increase of the number of inventions when firms perceive patent protection to be strong. Thus, a higher number of inventions in a portfolio may reflect both genuine creation of value or stronger appropriability via patents. |
| Keywords: | intellectual property rights; inventors; patents; technical change |
| JEL: | L20 O31 O33 O34 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9264&r=tid |
| By: | Kenneth Flamm |
| Abstract: | The impact of patent pools on the rate and direction of technological change is an open question in both theoretical and empirical studies. Economic theory makes no unequivocal prediction. By contrast, empirical studies of patent pools, to date, have largely concluded that patent pools have been associated with reduced rates of technical innovation in the industries studied. This study differs from previous empirical studies of patent pools by focusing primarily on direct measures of innovation in product markets, rather than on indirect correlates of innovation (like patents), and by exploiting variation over time in how pools were organized in the same technology area. The paper analyzes the economic history of two successive sets of patent pools organized in substantially the same technological area -- the use of optical discs in data storage peripherals connected to computer systems. These two patent pool episodes differed significantly in their organizational and institutional details. These differences appear to have coincided with very different effects on the structure of product markets, and the rate of technical innovation in optical disc products. The analysis concludes that different approaches to pool organization and licensing policies implemented in these two patent pool examples were associated with very different outcomes. The clear implication is that organizational details matter: no single conclusion is likely to fit all cases. As theory seems to predict, the empirical effects of patent pools on innovation are likely to be ambiguous, dependent on the historical and institutional particulars of the pool and the industry it affects. |
| JEL: | O3 O31 O33 O34 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18931&r=tid |
| By: | De Vries, G.A.; Pennings, H.P.G.; Block, J.H. |
| Abstract: | We analyze the initial intellectual property (IP) right of 4,703 start-up entrants in the US, distinguishing between trademark and patent applications. The results show that start-ups are more likely to file for a trademark instead of a patent when entering into more competitive market structures. Further, we find that start-ups with a focus on distribution that serves end-consumers are more likely to file for a trademark and that start-ups that operate upstream and sell to other businesses are more likely to file for a patent. Lastly, the external influences on a start-up‟s management, such as the involvement of a venture capitalist (VC), affect IP applications. The increased incentive of VC-backed start-ups to become operational on the market makes them more likely to file initial IP in the form of a trademark rather than a patent. Among other factors, we control for R&D and advertising intensity in the industry and distinguish between more technical and more service-driven industries. |
| Keywords: | competition;intellectual property;trademarks;venture capital;patents |
| Date: | 2013–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765039515&r=tid |
| By: | Ricardo Biscaia (CIPES - Centro de Investigação de Políticas de Ensino Superior); Paula Sarmento (FEP - Faculdade de Economia do Porto) |
| Abstract: | This paper analyzes the location patterns of firms in Cournot spatial discrimination setting. The innovation step is that firms are allowed to have different marginal costs of the production. When analyzing the two-stage location-quantity game, we conclude that firms choose the central agglomeration outcome whatever the marginal cost difference between them. When maximizing social welfare, the social planner chooses the central location for both firms as well if the marginal cost differences are not too big. When allowed to decide if the inefficient firm should be in the market or not, the social planner removes the inefficient firm from the market if its cost is too high. |
| Keywords: | Spatial Competition, Cournot Discrimination, Market Structure, Cost Differentials |
| JEL: | D21 L11 L13 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:462&r=tid |
| By: | Nan Yang (Tilburg University); Jeffrey Campbell (Federal Reserve Bank of Chicago); Jaap Abbring (Tilburg University) |
| Abstract: | This paper develops a tractable model for the computational and empirical analysis of infinite-horizon oligopoly dynamics. It features aggregate demand uncertainty, sunk entry costs, stochastic idiosyncratic technological progress, and irreversible exit. We develop an algorithm for computing a symmetric Markov-perfect equilibrium quickly by finding the fixed points to a finite sequence of low-dimensional contraction mappings. If at most two heterogenous firms serve the industry, the resuilt is the unique "natural" equilibrium in which a high protability firm never exits leaving behind a low protability competitor. With more than two firms, the algorithm always finds a natural equilibrium. We present a simple rule for checking ex post whether the calculated equilibrium is unique, and we illustrate the model's application by assessing the robustness of Fershtman and Pakes' (2000) finding that collusive pricing can increase consumer surplus by stimulating product development. The hundreds of equilibrium calculations this requires take only a few minutes on an off-the-shelf laptop computer. We also present a feasible algorithm for the model's estimation using the generalized method of moments. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed012:506&r=tid |