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Spillover Effects of Intellectual Property Protection in the Interwar Aircraft Industry

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  • Walker Hanlon
  • Taylor Jaworski

Abstract

Can strengthening intellectual property protection for producers of one good affect innovation in other related goods? To answer this question, we exploit a unique policy experiment in the interwar military aircraft industry. Airframe designs had little intellectual property protection before 1926, but changes passed by Congress in 1926 provided airframe manufacturers with enhanced property rights over new designs. We show that granting property rights to airframe producers increased innovation in airframes, but slowed innovation in aero-engines, a complementary good where there was no change in the availability of intellectual property protection. We propose and test a simple theory that explains these patterns.

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  • Walker Hanlon & Taylor Jaworski, 2022. "Spillover Effects of Intellectual Property Protection in the Interwar Aircraft Industry," The Economic Journal, Royal Economic Society, vol. 132(645), pages 1824-1851.
    • Handle: RePEc:oup:econjl:v:132:y:2022:i:645:p:1824-1851.
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    More about this item

    JEL classification:

    • N72 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: 1913-
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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