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Patents, competition and firms’ innovation incentives

Author

Listed:
  • Pilar Beneito

    (University of Valencia and ERICES)

  • María E. Rochina-Barrachina

    (University of Valencia and ERICES)

  • Amparo Sanchis

    () (University of Valencia and ERICES)

Abstract

In this paper we analyze how industrial property rights (IPRs), measured by patents granted, affect competition at the industry level, and their induced effects on firms’ innovation incentives. We use for that purpose a panel dataset of Spanish manufacturing firms for the period 1990-2006. Using indicators of fundamentals of competitive pressure and factor analysis techniques, we construct a new synthetic measure of competition. Our results indicate that although the use of IPRs (in terms of industry patenting intensity) reduces market competition, it may also encourage firms’ innovation incentives (in terms of firms’ R&D expenditures and the number of product innovations).

Suggested Citation

  • Pilar Beneito & María E. Rochina-Barrachina & Amparo Sanchis, 2012. "Patents, competition and firms’ innovation incentives," Working Papers 1211, Department of Applied Economics II, Universidad de Valencia.
  • Handle: RePEc:eec:wpaper:1211
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    References listed on IDEAS

    as
    1. Wörter, Martin & Rammer, Christian & Arvanitis, Spyros, 2010. "Innovation, competition and incentives for R&D," ZEW Discussion Papers 10-039, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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    Cited by:

    1. repec:spr:epolit:v:35:y:2018:i:2:d:10.1007_s40888-018-0105-7 is not listed on IDEAS
    2. Basant, Rakesh, 2017. "Exploring Linkages between Innovation and public policy- challenges and Opportunities," IIMA Working Papers WP 2017-11-01, Indian Institute of Management Ahmedabad, Research and Publication Department.

    More about this item

    Keywords

    IPRs; patents; competition; innovation;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - 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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