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The (Anti-)Competitive Effect of Intellectual Property Rights

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Abstract

We test whether intellectual property rights (IPRs) foster or hinder innovation by estimating IV structural equations for a large sample of Swiss firms. We find that better appropriability conditions at the industry level raise the number of competitors. However, conditional on the given industry structure, individual firms face fewer competitors, if they actually use IPRs. The further impact of fewer competitors is to raise R&D, when initial competition is strong, but to reduce it, when initial competition is weak (“inverted U†).

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  • Martin Wörter & Michael Peneder & Mark Thompson, 2019. "The (Anti-)Competitive Effect of Intellectual Property Rights," KOF Working papers 19-454, KOF Swiss Economic Institute, ETH Zurich.
    • Handle: RePEc:kof:wpskof:19-454
    DOI: 10.3929/ethz-b-000334871
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    1. James Bessen & Robert M. Hunt, 2007. "An Empirical Look at Software Patents," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(1), pages 157-189, March.
    2. Josh Lerner, 2009. "The Empirical Impact of Intellectual Property Rights on Innovation: Puzzles and Clues," American Economic Review, American Economic Association, vol. 99(2), pages 343-348, May.
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    Cited by:

    1. Michael Peneder & Spyros Arvanitis & Christian Rammer & Tobias Stucki & Martin Wörter, 2022. "Policy instruments and self-reported impacts of the adoption of energy saving technologies in the DACH region," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 49(2), pages 369-404, May.

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    More about this item

    Keywords

    patents; innovation; competition; simultaneous system;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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