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Compulsory Licensing: Evidence from the Trading with the Enemy Act

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  • Petra Moser
  • Alessandra Voena

Abstract

Compulsory licensing allows firms in developing countries to produce foreign-owned inventions without the consent of foreign patent owners. This paper uses an exogenous event of compulsory licensing after World War I under the Trading with the Enemy Act to examine the effects of compulsory licensing on domestic invention. Difference-in-differences analyses of nearly 130,000 chemical inventions suggest that compulsory licensing increased domestic invention by 20 percent. (JEL D45, L24, N42, O31, O34)

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.102.1.396
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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 102 (2012)
Issue (Month): 1 (February)
Pages: 396-427

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Handle: RePEc:aea:aecrev:v:102:y:2012:i:1:p:396-427

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References

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  1. Lerner, Josh, 1995. "Patenting in the Shadow of Competitors," Journal of Law and Economics, University of Chicago Press, vol. 38(2), pages 463-95, October.
  2. Nancy L Stokey, 1986. "Learning-by-Doing and the Introduction of New Goods," Discussion Papers 699, Northwestern University, Center for Mathematical Studies in Economics and Management Science, revised May 1987.
  3. Gilbert, R. & Shapiro, C., 1988. "Optimal Patent Length And Breadth," Papers 28, Princeton, Woodrow Wilson School - Discussion Paper.
  4. Imbens, G. & Lancaster, T., 1992. "Case-Control Studies with Contaminated Controls," Harvard Institute of Economic Research Working Papers 1612, Harvard - Institute of Economic Research.
  5. Petra Moser, 2007. "Why Don't Inventors Patent?," NBER Working Papers 13294, National Bureau of Economic Research, Inc.
  6. Irwin, Douglas A & Klenow, Peter J, 1994. "Learning-by-Doing Spillovers in the Semiconductor Industry," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1200-1227, December.
  7. Michael Kremer, 2002. "Pharmaceuticals and the Developing World," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 67-90, Fall.
  8. Shubham Chaudhuri & Pinelopi K. Goldberg & Panle Jia, 2003. "Estimating the Effects of Global Patent Protection in Pharmaceuticals: A Case Study of Quinolones in India," NBER Working Papers 10159, National Bureau of Economic Research, Inc.
  9. Tandon, Pankaj, 1982. "Optimal Patents with Compulsory Licensing," Journal of Political Economy, University of Chicago Press, vol. 90(3), pages 470-86, June.
  10. Genesove, David, 2006. "The Dye Famine and its Aftermath: Knowledge Diffusion and Entry," CEPR Discussion Papers 5890, C.E.P.R. Discussion Papers.
  11. Alexander J. Field, 2003. "The Most Technologically Progressive Decade of the Century," American Economic Review, American Economic Association, vol. 93(4), pages 1399-1413, September.
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Citations

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Cited by:
  1. Petra Moser & Paul W. Rhode, 2011. "Did Plant Patents Create the American Rose?," NBER Working Papers 16983, National Bureau of Economic Research, Inc.
  2. Leonid Kogan & Dimitris Papanikolaou & Amit Seru & Noah Stoffman, 2012. "Technological Innovation, Resource Allocation, and Growth," NBER Working Papers 17769, National Bureau of Economic Research, Inc.
  3. Jeffrey Clemens, 2012. "The Effect of U.S. Health Insurance Expansions on Medical Innovation," Discussion Papers 11-016, Stanford Institute for Economic Policy Research.
  4. Eric Bond & Kamal Saggi, 2012. "Compulsory licensing, price controls, and access to patented foreign products," Vanderbilt University Department of Economics Working Papers vuecon-12-00006, Vanderbilt University Department of Economics.
  5. John Kennedy, 2011. "A critical review of against intellectual monopoly," The Review of Austrian Economics, Springer, vol. 24(1), pages 81-84, March.
  6. Ricardo Mora & Iliana Reggio, 2012. "Treatment effect identification using alternative parallel assumptions," Economics Working Papers we1233, Universidad Carlos III, Departamento de Economía.

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