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Patent thickets, defensive patenting, and induced R&D: an empirical analysis of the costs and potential benefits of fragmentation in patent ownership

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  • Mahdiyeh Entezarkheir

    (Huron University College at Western University)

Abstract

Patent thickets are sets of overlapping intellectual property rights that occur in fragmented technology markets. Their potential impacts on innovation have become an increasing concern in recent years. I estimate the direct and indirect effects of patent thickets on market value of publicly traded manufacturing firms. I find that patent thickets decrease the market value of firms, holding R&D and patenting activities of these firms constant. I also find that while firms do not change their R&D activities in response to patent thickets, they do reduce negative cost effects of patent thickets on market value through defensive patenting.

Suggested Citation

  • Mahdiyeh Entezarkheir, 2017. "Patent thickets, defensive patenting, and induced R&D: an empirical analysis of the costs and potential benefits of fragmentation in patent ownership," Empirical Economics, Springer, vol. 52(2), pages 599-634, March.
    • Handle: RePEc:spr:empeco:v:52:y:2017:i:2:d:10.1007_s00181-016-1079-3
    DOI: 10.1007/s00181-016-1079-3
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    3. Yuan, Xiaodong & Li, Xiaotao, 2020. "A network analytic method for measuring patent thickets: A case of FCEV technology," Technological Forecasting and Social Change, Elsevier, vol. 156(C).
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    5. Keishun Suzuki & Shin Kishimoto, 2023. "Leading Patent Breadth, Endogenous Quality Choice, and Economic Growth," ISER Discussion Paper 1205, Institute of Social and Economic Research, Osaka University.

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    More about this item

    Keywords

    Innovation; Patent thicket; Patent; Spillovers; Market value; Fragmentation; R&D;
    All these keywords.

    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • 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
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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