Advanced Search
MyIDEAS: Login to save this article or follow this journal

Specialized supply firms, property rights and firm boundaries

Contents:

Author Info

  • Ashish Arora
  • Robert P. Merges

Abstract

The proper specification of intellectual property rights (IPRs) is a delicate and controversial matter. In this paper, we consider one specialized context in which IPRs can add to efficiency. We build on contributions of both 'firm capabilities' scholars (e.g. Teece, Pisano et al.) and 'property rights' economists (e.g. Hart) to show that IPRs can affect efficiency by influencing the location of technological innovation. Using a simple set up, where the key choice is whether a technology-intensive input will be supplied by an independent firm or produced in-house, we analyze how the choice is affected by the strength of IPRs and by the existence (and nature) of information spillovers. Specifically, we show that when the supply relationship is likely to produce new information of value to the supplier, stronger property rights favor independent suppliers over vertical integration. An important implication of our model (backed by empirical case studies) is that strong IPRs therefore encourage investments in specialized firms with strong 'firm capabilities' in the area of innovative input supply. IPRs therefore may play a role--along with multiple other factors--in the location of firm boundaries in some cases. This contribution to the viability of small, specialized firms, with their superior ability to innovate in some cases, must be taken into account in evaluating recent criticisms of over-fragmented IPR ownership (i.e. the 'anticommons' problem). It also contributes to an understanding of IPRs in the 'post-Chandlerian' economy, where smaller, specialized firms play a prominent role. Copyright 2004, Oxford University Press.

Download Info

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Bibliographic Info

Article provided by Oxford University Press in its journal Industrial and Corporate Change.

Volume (Year): 13 (2004)
Issue (Month): 3 (June)
Pages: 451-475

as in new window
Handle: RePEc:oup:indcch:v:13:y:2004:i:3:p:451-475

Contact details of provider:
Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
Fax: 01865 267 985
Email:
Web page: http://icc.oupjournals.org/

Order Information:
Web: http://www.oup.co.uk/journals

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:oup:indcch:v:13:y:2004:i:3:p:451-475. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.