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Patents, licensing, and market structure in the chemical industry

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  • Arora, Ashish

Abstract

The strategies of rent appropriation and market structure are inter- dependent. How firms use patents depends upon industry structure, and in turn, affects industry structure. In the early part of the history of the chemical industry, market leaders combined patents and secrecy to deter entry. Patents were also used to within cartels to organize technology licensing. The role of patents changed in the less concentrated post war markets. In bulk organic chemicals and petrochemicals, even chemical producers use licensing as an important means of generating revenue from process innovations. The increased importance of technology licensing is closely related to the emergence of a class of specialized process design and engineering firms that have played an important role in the development and diffusion of process innovations. In so doing, they have helped lower entry barriers and increase competition in the industry.
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  • Arora, Ashish, 1997. "Patents, licensing, and market structure in the chemical industry," Research Policy, Elsevier, vol. 26(4-5), pages 391-403, December.
    • Handle: RePEc:eee:respol:v:26:y:1997:i:4-5:p:391-403
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    More about this item

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • N60 - Economic History - - Manufacturing and Construction - - - General, International, or Comparative

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