IDEAS home Printed from https://ideas.repec.org/p/bri/uobdis/04-565.html
   My bibliography  Save this paper

When Does Patent Protection Stimulate Innovation?

Author

Listed:
  • Andreas Panagopoulos

Abstract

Patents act as an incentive to innovate. However, as this paper argues, patents can lead the patent holder to rest on his laurels and at the same time discourage some innovators from innovating, reducing knowledge spillovers. The combined result of the above suggests an inverse U relationship between patent protection and output growth.

Suggested Citation

  • Andreas Panagopoulos, 2004. "When Does Patent Protection Stimulate Innovation?," Bristol Economics Discussion Papers 04/565, School of Economics, University of Bristol, UK.
    • Handle: RePEc:bri:uobdis:04/565
    as

    Download full text from publisher

    File URL: http://www.bristol.ac.uk/efm/media/workingpapers/working_papers/pdffiles/dp04565.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bronwyn H. Hall & Adam B. Jaffe & Manuel Trajtenberg, 2000. "Market Value and Patent Citations: A First Look," NBER Working Papers 7741, National Bureau of Economic Research, Inc.
    2. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    3. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
    4. Jones Charles I., 2001. "Was an Industrial Revolution Inevitable? Economic Growth Over the Very Long Run," The B.E. Journal of Macroeconomics, De Gruyter, vol. 1(2), pages 1-45, August.
    5. Josh Lerner, 2002. "150 Years of Patent Protection," American Economic Review, American Economic Association, vol. 92(2), pages 221-225, May.
    6. Reinganum, Jennifer F, 1984. "Practical Implications of Game Theoretic Models of R&D," American Economic Review, American Economic Association, vol. 74(2), pages 61-66, May.
    7. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    8. Segerstrom, Paul S, 1998. "Endogenous Growth without Scale Effects," American Economic Review, American Economic Association, vol. 88(5), pages 1290-1310, December.
    9. Wesley M. Cohen & Richard R. Nelson & John P. Walsh, 2000. "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)," NBER Working Papers 7552, National Bureau of Economic Research, Inc.
    10. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    11. Beath, John & Katsoulacos, Yannis & Ulph, David, 1989. "Strategic R&D Policy," Economic Journal, Royal Economic Society, vol. 99(395), pages 74-83, Supplemen.
    12. Christopher Harris & John Vickers, 1987. "Racing with Uncertainty," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(1), pages 1-21.
    13. Panagopoulos, Andreas, 2003. "Understanding when universities and firms form RJVs: the importance of intellectual property protection," International Journal of Industrial Organization, Elsevier, vol. 21(9), pages 1411-1433, November.
    14. Grenadier, Steven R, 1996. "The Strategic Exercise of Options: Development Cascades and Overbuilding in Real Estate Markets," Journal of Finance, American Finance Association, vol. 51(5), pages 1653-1679, December.
    15. Hall, Bronwyn H. & Jaffe, Adam & Trajtenberg, Manuel, 2001. "Market Value and Patent Citations: A First Look," Department of Economics, Working Paper Series qt8vh1c20f, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    16. Nalin Kulatilaka & Enrico C. Perotti, 1998. "Strategic Growth Options," Management Science, INFORMS, vol. 44(8), pages 1021-1031, August.
    17. Ted O'Donoghue & Suzanne Scotchmer & Jacques‐François Thisse, 1998. "Patent Breadth, Patent Life, and the Pace of Technological Progress," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(1), pages 1-32, March.
    18. Bart Lambrecht & William Perraudin, 1996. "Real Options and Preemption," Archive Working Papers 026, Birkbeck, Department of Economics, Mathematics & Statistics.
    19. Carmen Matutes & Pierre Regibeau & Katharine Rockett, 1996. "Optimal Patent Design and the Diffusion of Innovations," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 60-83, Spring.
    20. Reinganum, Jennifer F., 1989. "The timing of innovation: Research, development, and diffusion," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 14, pages 849-908, Elsevier.
    21. Nancy T. Gallini, 2002. "The Economics of Patents: Lessons from Recent U.S. Patent Reform," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 131-154, Spring.
    22. Braithwaite,John & Drahos,Peter, 2000. "Global Business Regulation," Cambridge Books, Cambridge University Press, number 9780521784993, November.
    23. Hall, Bronwyn H. & Jaffee, Adam & Trajtenberg, Manuel, 2000. "Market Value and Patent Citations: A First Look," Department of Economics, Working Paper Series qt1rh8k6z2, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    24. Glenn C. Loury, 1979. "Market Structure and Innovation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 93(3), pages 395-410.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Andreas Panagopoulos, 2004. "Patent Protection As A Stimulant for Risky Innovation. Could TRIPS be Counterproductive?," Bristol Economics Discussion Papers 04/566, School of Economics, University of Bristol, UK.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andreas Panagopoulos, 2004. "Patent Protection As A Stimulant for Risky Innovation. Could TRIPS be Counterproductive?," Bristol Economics Discussion Papers 04/566, School of Economics, University of Bristol, UK.
    2. Andreas Panagopoulos, 2011. "The Effect of IP Protection on Radical and Incremental Innovation," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 2(3), pages 393-404, September.
    3. Mahdiyeh Entezarkheir & Saeed Moshiri, 2021. "Innovation spillover and merger decisions," Empirical Economics, Springer, vol. 61(5), pages 2419-2448, November.
    4. 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.
    5. Bronwyn Hall & Rosemaire Ham Ziedonis, 2000. "The Patent Paradox Revisited: An Empirical Study of Patenting in the US Semiconductor Industry, 1979-95," Economics Series Working Papers 2000-W16, University of Oxford, Department of Economics.
    6. Per Botolf Maurseth, 2005. "Lovely but dangerous: The impact of patent citations on patent renewal," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(5), pages 351-374.
    7. Strulik, Holger & Prettner, Klaus & Prskawetz, Alexia, 2010. "R\&D-based Growth in the Post-modern Era," Hannover Economic Papers (HEP) dp-457, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    8. Bucci, Alberto, 2013. "Returns to specialization, competition, population, and growth," Journal of Economic Dynamics and Control, Elsevier, vol. 37(10), pages 2023-2040.
    9. repec:wsi:acsxxx:v:21:y:2019:i:08:n:s1363919619500129 is not listed on IDEAS
    10. Gao, Wenlian & Chou, Julia, 2015. "Innovation efficiency, global diversification, and firm value," Journal of Corporate Finance, Elsevier, vol. 30(C), pages 278-298.
    11. Jaffe, Adam B. & Newell, Richard G. & Stavins, Robert N., 2003. "Chapter 11 Technological change and the environment," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 1, chapter 11, pages 461-516, Elsevier.
    12. Ali-Yrkkö, Jyrki, 2006. "Technology Sourcing Through Acquisitions Do High Quality Patents Attract Acquires?," Discussion Papers 1025, The Research Institute of the Finnish Economy.
    13. Nicolas van Zeebroeck, 2009. "From patent renewals to applications survival: do portfolio management strategies play a role in patent length?," Working Papers CEB 09-028.RS, ULB -- Universite Libre de Bruxelles.
    14. Coad, Alex & Rao, Rekha, 2008. "Innovation and firm growth in high-tech sectors: A quantile regression approach," Research Policy, Elsevier, vol. 37(4), pages 633-648, May.
    15. Minniti, A. & Parello, C. & Segerstrom, P. S., 2008. "A Schumpeterian Growth Model with Heterogenous Firms," MPRA Paper 13674, University Library of Munich, Germany.
    16. Boikos, Spyridon & Bucci, Alberto & Stengos, Thanasis, 2013. "Non-monotonicity of fertility in human capital accumulation and economic growth," Journal of Macroeconomics, Elsevier, vol. 38(PA), pages 44-59.
    17. Louise Keely, 2001. "Using Patents In Growth Models," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 10(6), pages 449-492.
    18. Ali-Yrkkö, Jyrki, . "Essays on the Impacts of Technology Development and R&D Subsidies," ETLA A, The Research Institute of the Finnish Economy, number 43, June.
    19. Nancy Gallini, 2017. "Do patents work? Thickets, trolls and antibiotic resistance," Canadian Journal of Economics, Canadian Economics Association, vol. 50(4), pages 893-926, November.
    20. Antonio Minniti & Carmelo Parello & Paul Segerstrom, 2013. "A Schumpeterian growth model with random quality improvements," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 52(2), pages 755-791, March.
    21. Mahdiyeh Entezarkheir & Saeed Moshiri, 2019. "Is innovation a factor in merger decisions? Evidence from a panel of US firms," Empirical Economics, Springer, vol. 57(5), pages 1783-1809, November.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • K0 - Law and Economics - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bri:uobdis:04/565. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Vicky Jackson (email available below). General contact details of provider: https://edirc.repec.org/data/sebriuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.