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Patent Publication and Innovation

Author

Listed:
  • Deepak Hegde
  • Kyle F. Herkenhoff
  • Chenqi Zhu

Abstract

How does the publication of patents affect innovation? We answer this question by exploiting a large-scale natural experiment—the passage of the American Inventor's Protection Act of 1999 (AIPA)—that accelerated the public disclosure of most U.S. patents by two years. We obtain causal estimates by comparing U.S. patents subject to the law change with “twin” European patents which were not. After AIPA's enactment, U.S. patents receive more and faster follow-on citations, indicating an increase in technology diffusion. Technological overlap increases between distant but related patents and decreases between highly similar patents, and patent applications are less likely to be abandoned post-AIPA, suggesting a reduction in duplicative R&D. Firms exposed to one standard deviation longer patent grant delays increased their R&D investment by 4% after AIPA. These findings are consistent with our theoretical framework in which AIPA provisions news shocks about related technologies to follow-on inventors and thus alters their innovation decisions.

Suggested Citation

  • Deepak Hegde & Kyle F. Herkenhoff & Chenqi Zhu, 2022. "Patent Publication and Innovation," NBER Working Papers 29770, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:29770
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    Cited by:

    1. Arianna Martinelli & Julia Mazzei, 2022. "Death squad or quality improvement? The impact of introducing post-grant review on U.S. patent quality," LEM Papers Series 2022/34, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    2. Kong, Nancy & Dulleck, Uwe & Jaffe, Adam B. & Sun, Shupeng & Vajjala, Sowmya, 2023. "Linguistic metrics for patent disclosure: Evidence from university versus corporate patents," Research Policy, Elsevier, vol. 52(2).
    3. Boeing, Philipp & Brandt, Loren & Dai, Ruochen & Lim, Kevin & Peters, Bettina, 2024. "The Anatomy of Chinese Innovation: Insights on Patent Quality and Ownership," IZA Discussion Papers 16869, Institute of Labor Economics (IZA).
    4. Daniel P. Gross, 2023. "The Hidden Costs of Securing Innovation: The Manifold Impacts of Compulsory Invention Secrecy," Management Science, INFORMS, vol. 69(4), pages 2318-2338, April.
    5. KADOWAKI Makoto & NAGAOKA Sadao, 2024. "Early Disclosure and Patent Value: How do you know that you are a pioneer?," Discussion papers 24050, Research Institute of Economy, Trade and Industry (RIETI).
    6. Liu, Zhiying & Hu, Kaili & Hussain, Ammar, 2023. "R&D disclosure and corporate innovation: Mediating role of financing structure," Finance Research Letters, Elsevier, vol. 56(C).
    7. Helian Xu & Shiqi Deng, 2024. "Digital Mergers and Acquisitions and Enterprise Innovation Quality: Analysis Based on Research and Development Investment and Overseas Subsidiaries," Sustainability, MDPI, vol. 16(3), pages 1-14, January.

    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • 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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