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Patent thickets, licensing and innovative performance

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  • Iain M. Cockburn
  • Megan J. MacGarvie
  • Elisabeth Müller

Abstract

We examine the relationship between fragmented intellectual property (IP) rights and the innovative performance of firms, taking into consideration the role played by in-licensing of IP. We find that firms facing more fragmented IP landscapes have a higher probability of in-licensing. We observe a negative relationship between IP fragmentation and innovative performance, but only for firms that engage in in-licensing. In contrast, greater IP fragmentation is associated with higher innovative performance for firms that do not in-license. Furthermore, the effects of fragmentation on innovation also appear to depend on the size of a firm's patent portfolio. These results suggest that the effects of fragmentation of upstream IP rights are not uniform, and instead vary according to the characteristics of the downstream firm. Copyright 2010 The Author 2010. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.

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Bibliographic Info

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

Volume (Year): 19 (2010)
Issue (Month): 3 (June)
Pages: 899-925

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Handle: RePEc:oup:indcch:v:19:y:2010:i:3:p:899-925

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  1. James Bessen & Eric Maskin, 2009. "Sequential innovation, patents, and imitation," RAND Journal of Economics, RAND Corporation, vol. 40(4), pages 611-635.
  2. Czarnitzki, Dirk & Kraft, Kornelius, 2005. "License Expenditures of Incumbents and Potential Entrants: An Empirical Analysis of Firm Behavior," ZEW Discussion Papers 05-35, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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  7. Bessen, James, 2004. "Holdup and licensing of cumulative innovations with private information," Economics Letters, Elsevier, vol. 82(3), pages 321-326, March.
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  14. Ashish Arora & Andrea Fosfuri & Alfonso Gambardella, 2004. "Markets for Technology: The Economics of Innovation and Corporate Strategy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262511819, December.
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Citations

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Cited by:
  1. Grimpe, Christoph & Hussinger, Katrin, 2014. "Pre-empted patents, infringed patents and firms’ participation in markets for technology," Research Policy, Elsevier, vol. 43(3), pages 543-554.
  2. Dr Chiara Rosazza Bondibene, 2012. "A Study of Patent Thickets," NIESR Discussion Papers 11129, National Institute of Economic and Social Research.
  3. Dan Andrews & Chiara Criscuolo, 2013. "Knowledge-Based Capital, Innovation and Resource Allocation," OECD Economics Department Working Papers 1046, OECD Publishing.
  4. Schwiebacher, Franz, 2012. "Complementary assets, patent thickets and hold-up threats: Do transaction costs undermine investments in innovation?," ZEW Discussion Papers 12-015, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  5. Schwiebacher, Franz, 2013. "Does fragmented or heterogeneous IP ownership stifle investments in innovation?," ZEW Discussion Papers 13-096, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  6. NAGAOKA Sadao & NISHIMURA Yoichiro, 2014. "Complementarity, Fragmentation, and the Effects of Patent Thickets," Discussion papers 14001, Research Institute of Economy, Trade and Industry (RIETI).
  7. Fischer, Timo & Henkel, Joachim, 2012. "Patent trolls on markets for technology – An empirical analysis of NPEs’ patent acquisitions," Research Policy, Elsevier, vol. 41(9), pages 1519-1533.
  8. Gambardella, Alfonso & Giarratana, Marco S., 2013. "General technological capabilities, product market fragmentation, and markets for technology," Research Policy, Elsevier, vol. 42(2), pages 315-325.

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