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Technology Entry in the Presence of Patent Thickets

Author

Listed:
  • Bronwyn H Hall
  • Georg von Graevenitz
  • Christian Helmers

Abstract

We analyze the effect of patent thickets on entry into technology areas by firms in the UK. We present a model that describes incentives to enter technology areas characterized by varying technological opportunity, complexity, and the potential for hold-up due to the presence of patent thickets. We show empirically that our measure of patent thickets is associated with a reduction of first time patenting in a given technology area controlling for the level of technological complexity and opportunity. Technological areas characterized by more technological complexity and opportunity, in contrast, see more entry. Our evidence indicates that patent thickets raise entry costs, which leads to less entry into technologies regardless of a firm’s size.
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Suggested Citation

  • Bronwyn H Hall & Georg von Graevenitz & Christian Helmers, 2021. "Technology Entry in the Presence of Patent Thickets," Oxford Economic Papers, Oxford University Press, vol. 73(2), pages 953-953.
    • Handle: RePEc:oup:oxecpp:v:73:y:2021:i:2:p:953-953.
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    File URL: http://hdl.handle.net/10.1093/oep/gpaa043
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    Cited by:

    1. Pardy, Martina, 2025. "Multinationals and intra-regional innovation concentration," Research Policy, Elsevier, vol. 54(6).
    2. Gaétan de Rassenfosse & Kyle Higham, 2024. "Decentralising the patent system," Chapters, in: Walter G. Park (ed.), Handbook of Innovation and Intellectual Property Rights, chapter 8, pages 120-138, Edward Elgar Publishing.
    3. Sadao NAGAOKA & Yoichiro NISHIMURA, 2014. "Complementarity, Fragmentation, and the Effects of Patent Thickets," Discussion papers 14001, Research Institute of Economy, Trade and Industry (RIETI).
    4. Dan Prud’homme & Tony W. Tong, 2024. "Rethinking firm-specific advantages from intellectual property rights: Boundary conditions for MNEs," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 55(1), pages 91-109, February.
    5. Ufuk Akcigit & Sina T. Ates, 2021. "Ten Facts on Declining Business Dynamism and Lessons from Endogenous Growth Theory," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(1), pages 257-298, January.
    6. Yun Hou & I.P.L. Png & Xi Xiong, 2023. "When stronger patent law reduces patenting: Empirical evidence," Strategic Management Journal, Wiley Blackwell, vol. 44(4), pages 977-1012, April.
    7. Oliver Kovacs, 2019. "Big IFs in Productivity-Enhancing Industry 4.0," Social Sciences, MDPI, vol. 8(2), pages 1-17, January.
    8. Gaétan De Rassenfosse & Paul H. Jensen & T'Mir Julius & Alfons Palangkaraya & Elizabeth Webster, 2023. "Is the Patent System an Even Playing Field? The Effect of Patent Attorney Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 71(1), pages 124-142, March.
    9. Pardy, Martina, 2025. "Multinationals and intra-regional innovation concentration," LSE Research Online Documents on Economics 127983, London School of Economics and Political Science, LSE Library.
    10. Hussingera, Katrin & Issahd, Wunnam, 2022. "Trade secret protection and R&D investment of family firms," ZEW Discussion Papers 22-039, ZEW - Leibniz Centre for European Economic Research.
    11. Zihao Jiang & Jiarong Shi, 2023. "Quantity or quality? Policy effects on innovations in the wind power industry in China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(8), pages 4507-4522, December.
    12. Cui, Chuantao & Li, Leona Shao-Zhi, 2023. "Trade policy uncertainty and new firm entry: Evidence from China," Journal of Development Economics, Elsevier, vol. 163(C).
    13. Coad, Alex & Kaiser, Ulrich & Kuhn, Johan, 2021. "Spin doctors vs the spawn of capitalism: Who founds university and corporate startups?," Research Policy, Elsevier, vol. 50(10).
    14. Katrin Hussinger & Wunnam Basit Issah, 2022. "Trade Secret Protection and R&D Investment of Family Firms," DEM Discussion Paper Series 22-11, Department of Economics at the University of Luxembourg.
    15. Scott, Peter & Spadavecchia, Anna, 2023. "Patents, industry control, and the rise of the giant American corporation," Research Policy, Elsevier, vol. 52(1).
    16. Mukund Chari & H. Kevin Steensma & Charles Connaughton & Ralph Heidl, 2022. "The influence of patent assertion entities on inventor behavior," Strategic Management Journal, Wiley Blackwell, vol. 43(8), pages 1666-1690, August.
    17. Cowan, Robin & Jonard, Nicolas & Samson, Ruth, 2024. "Strategies of search and patenting under different IPR regimes," MERIT Working Papers 2024-008, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    18. Ben Vermeulen & Andreas Pyka, 2018. "The Role of Network Topology and the Spatial Distribution and Structure of Knowledge in Regional Innovation Policy: A Calibrated Agent-Based Model Study," Computational Economics, Springer;Society for Computational Economics, vol. 52(3), pages 773-808, October.
    19. Patel, Pankaj C. & Guedes, Maria João, 2025. "Come and take it: Patenting pedigree and tenacity, takeover defenses, and patent valuation in post-IPO firms," Journal of Business Research, Elsevier, vol. 186(C).
    20. Po-Hsuan Hsu & Hsiao-Hui Lee & Tong Zhou, 2022. "Patent Thickets, Stock Returns, and Conditional CAPM," Management Science, INFORMS, vol. 68(11), pages 8343-8367, November.
    21. Dietl, M & Skrok & Benalcazar, P & Gątkowski, M & Rockett, K, 2017. "Pendency and Thickets," Economics Discussion Papers 19979, University of Essex, Department of Economics.
    22. Arianna Martinelli & Julia Mazzei & Daniele Moschella, 2022. "Patent disputes as emerging barriers to technology entry? Empirical evidence from patent opposition," LEM Papers Series 2022/12, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

    More about this item

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • 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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